Company registration in the United Kingdom: Legal aspects and advice

Company registration is the process of formalizing the status of a legal entity in accordance with the laws of a certain country. During this process, the company is officially recognized as a legal entity with its own legal capacity.

To receive this status, it is necessary to provide certain documentation and fulfill the requirements established by the state authorities. Due to registration, the entity is able to conduct commercial activities, conclude contracts, participate in court proceedings and perform other legally significant actions.

If you are thinking of setting up a successful business abroad, but want to get started as quickly as possible and without unnecessary bureaucracy, we recommend that you consider registering a company in the UK. The country is attractive for its stable legal system, developed financial sector, ease and speed of registration, and convenient tax system.

The Manimama team has conducted in-depth research, analyzed the main subtleties of registering a company in the United Kingdom, and is ready to share its results and help you choose the right jurisdiction. 

What are the main advantages of incorporating a company (business) in the United Kingdom?

1. Stable legal system:

The UK has one of the most stable and transparent legal systems in the world. Business and commercial laws are clear and predictable, ensuring the protection of property rights and business interests. This creates a favorable climate for investment and business.

2. Developed financial sector:

London is one of the world’s major financial centers, offering various financial services such as banking, insurance, accountancy, and consultancy. Businesses can access the services of a wide range of financial institutions, making it easier to raise capital and plan financially.

3. Stable tax system:

The UK has a reasonably stable tax system. The taxation of companies in the country is considered quite comfortable, particularly with the possibility of preferential conditions for small businesses just starting. In addition, the country has entered into numerous double taxation treaties, which minimizes tax liabilities for international companies. 

4. Good reputation and access to international markets:

The UK has a strong international reputation as a reliable place to do business. This opens doors to global markets and makes it easier to do business with international partners. Registering a company in the UK adds prestige and credibility with foreign customers and investors.

5. Simple and quick registration process:

Registering a company in the UK is fairly straightforward and can be done online via the Companies House website. The entire process can often be completed remotely, allowing entrepreneurs to start their businesses quickly and without unnecessary red tape.

6. Support for start-ups and innovation:

The UK government actively supports the development of start-ups and innovative businesses through various programs and initiatives. These include tax incentives for research and development, grants for innovation projects, and access to business incubators and accelerators. These measures contribute to the rapid growth of new technology companies.

7. Highly skilled workers:

The UK has access to highly skilled professionals in various fields, including IT, finance, science, and engineering. This provides businesses with the opportunity to attract talented employees, drive innovation, and increase business competitiveness.

8. High standard of living:

The UK offers a high standard of living, attracting highly skilled workers and entrepreneurs. The country provides top-notch education, healthcare, culture, and recreational opportunities, making it an appealing place for talented individuals and a pleasant environment for business and personal life.

How to register a company in the United Kingdom and what are the main requirements for such registration?

Step 1. Initial setup

  • Initiating a preliminary project assessment, assessing risks, choosing the type of company, preparing the necessary documents and obtaining the necessary permits, determining the time frame, budget, and resources required to complete the process
  • Preparation and filing of the package of documents

Step 2. Company registration

  • Choosing a company name
  • Decision on directors, shareholders/guarantors, people with significant control (PSC), company secretary (the last one is optional)
  • Preparation and providing of the package of documents from a client
  • Selection of a Standard Industrial Classification (SIC) code for further activities
  • Preparation of corporate documents (when registering a company online, the Memorandum of Association is created automatically as part of the registration; Articles of Association – you can use the model articles, or provide your own version)
  • Providing a registered office address
  • Submission of a completed online application for registration of a company in Companies House
  • Once you have registered with Companies House, you will receive a Certificate of Incorporation

Requirements for registering a company in Belgium on the example of a Private Сompany Limited by Shares (Ltd by shares):

  • Shareholders: at least one shareholder, who can be a director. There is no maximum number of shareholders.
  • Director: at least one director (must be a natural person, can be a shareholder or a secretary).
  • Company secretary: is not required. Some companies use them to take on some of the directors’ responsibilities. Thus, the company secretary can be a director. A company secretary does not need any qualifications.
  • Minimum share capital: there are no requirements.
  • Legal address: company’s registered office must be situated in England and Wales, Wales, Scotland or Northern Ireland.
  • Liability: liability of shareholders is limited to the amount, if any, unpaid on the shares held by them.
  • Accounting: сompany must keep accounting records that include all money received and spent by the company; details of assets owned by the company; debts the company owes or is owed; stock the company owns at the end of the financial year; the stocktakings you used to work out the stock figure; all goods bought and sold; who you bought and sold them to and from (unless you run a retail business). Company must also keep any other financial records, information and calculations it needs to prepare and file its annual accounts and Company Tax Return.

What do you have to know about taxes when registering a company in the United Kingdom?

Corporate income tax (CIT):

CIT rates:

  • small profits rate – 19% for companies with taxable profits below £50,000 (~ €59,000)
  • main rate: 25% for companies with taxable profits above £250,000 (~ €292,000)
  • marginal relief – applies to companies with profits between £50,000 (~ €59,000) and £250,000 (~ €292,000), providing a smoother transition to the main rate

Personal income tax (PIT):

Personal Allowance: the first £12,570 (~ €15,000) of income is tax-free.

PIT rates:

  • 20% is the basic rate on income between £12,571 (~ €15,000) and £50,270 (~ €59,000)
  • 40% is the higher rate on income between £50,271 (~ €59,000) and £125,140 (~ €146,000)
  • 45% additional rate on income above £125,140 (~ €146,000)

Value-added tax (VAT):

The standard VAT rate is 20% on most goods and services.

Reduced VAT rates:

  • 5% on some essentials like home energy and children’s car seats
  • 0% on items like most food and children’s clothes

For readers

Manimama provides services to help you choose the right jurisdiction for your company’s incorporation, as well as to register your business in the United Kingdom and create a strategic framework for its successful operation and development in the long term. We have a good understanding of the tax and legal peculiarities of specific jurisdictions, which helps our clients make an informed choice based on their unique needs and development strategies. In our work, we take into account factors affecting the business environment, such as the level of competition, access to financial and human resources, as well as opportunities for further growth and development in different jurisdictions. 

By choosing our company formation service in the United Kingdom, you are working with a law firm that values integrity, competence, and client satisfaction. Let us help you set up a company in the United Kingdom and pave the way for your business success!

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The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation.