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London City

OFFSHORE COMPANY FORMATION IN THE UK

​​How does the UK company formation process work? Here are the options available to you.

United Kingdom Company Formation

How does the UK company formation process work? Here are the options available to you.

Company formation in the UK offers three distinct models, including:

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  • Private limited company (Ltd.) 

  • Public limited liability company (PLC)

  • Limited liability partnership (LLP)
     

You can carry out the company formation process in the UK in 12 hours. Neither the director nor shareholders need to be UK residents.

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The Ltd. company model requires one person to incorporate, and only a single director and shareholder for formation. UK law also permits shareholders to be corporate entities.

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The primary advantage of this type of UK company formation is that the limited nature of the company protects shareholders if there is a business failure or the business incurs debts. The UK will also safeguard a corporate name. Once the Registrar of Companies accepts a name, no other entities may use it.

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Restrictions include not using names that imply any connection with the government or using names that suggest links with existing institutions. The UK also requires that there be a local registered office.

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A limited liability partnership organization doesn’t require shareholders. The benefits of this type of incorporation include broader flexibility than a private limited company, no director requirement, and ethical liability limitations. Unlike a private limited company, a limited liability partnership doesn’t entail a memorandum or articles of association. It also has no restrictions on owning and holding property.

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A VAT number is not automatically given to a UK company and is necessary if it will conduct business in the UK.

The UK is a party to several tax treaties and, if there is a tax treaty between the nation in which the business does the most economic activity and the UK, the terms of the agreement will apply. If the company currently pays taxes in a different company, it will be considered a UK tax resident. In some cases, where there is no tax treaty, the UK unilaterally offers double tax relief to such companies.

UK Company Formation Benefits

What are the benefits of company formation in the UK? Companies that do not perform any business activities in British territory are not subject to corporate taxes. UK company formation benefits from no minimum share capital requirements. You can also hold your annual meetings in any location, although you must hold one per British corporate legislation. You can also register your company name online. 

What are some other benefits of UK company formation?

Your dividends are not subject to the National Insurance Contribution, and taking a smaller salary and receiving more earnings through shareholder dividends is an effective way to reduce your tax burden. In the UK, one of the most curious company formation benefits is that entities do not have to set objectives in the Memorandum of Association, opening it up to a wide range of business activities. 

The benefits of company formation in the UK are:

  • Not subject to corporate taxes if all operations are outside the UK

  • Required annual meetings can be anywhere in the world

  • Online company name registration is available

  • No minimum required share capital

  • No need to set objectives in the Memorandum of Association, offering flexibility in the types of business activities to carry out

  • Dividends are not subject to the National Insurance Contribution

United Kingdom Company Formation Requirements

Your corporate name must not suggest any link with an existing institution. You must have a registered office in the same country where you choose to register; e.g., if you register in England, your registered office must be in England.

What are the other requirements for company formation in the UK? 

A limited liability partnership organized in the UK doesn’t require shareholders. You will need a VAT number if you are going to do business in the UK, however, you do not receive it automatically upon incorporation. A limited liability partnership also does not have any restrictions on owning and holding property.

The United Kingdom company formation requirements are:

  • Application to register a company (Form I101)

  • Articles of Association

  • Statement of guarantee or a statement of capital and initial shareholdings

  • Memorandum of Association

  • Details regarding your chosen activities by referencing them to a standard industrial classification code (SIC)

  • Statement of compliance or guarantee

  • Detailed of the proposed directors and secretary should you choose to have one and Persons with Significant Control (PSC). Should you not have a PSC, you would have to include a statement stating your entity does not have one

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