Company Formation in UK
Contemplating to set up a business in the United Kingdom? Given its well-established legal framework, ease of doing business, and access to a wide range of support services, company formation in UK is sought by entrepreneurs worldwide. Our team at Gryffin Capitalist can assist you with UK company formation.
What is Company Formation in the UK?
As the country is one of the world's prominent business hubs offering numerous opportunities, United Kingdom is an opportune time to get started. However, understanding the process is crucial for starting and running a successful business.
Here, we explore all the important things like various types of companies, steps involved, legal requirements, and the benefits of company formation in UK.
The process of legally creating a new company in the country is referred to as company formation in UK. It involves registering the business with the relevant authorities such as Companies House and selecting a legal structure that best suits business goals. It is crucial because it provides the business a legal identity, allowing it to operate, avail contracts, and manage taxes under the UK law.
Which Types of Companies can be Formed in the UK?
When you wish to start a business in an offshore location, it is important to understand the different types of legal entities. Let us take a look at the types of business structures offered in the UK:
1. Private Limited Company
For offshore company formation in UK, it is the preferred structure as there is no restriction on foreign ownership and is relatively easy to incorporate. Moreover, in a private limited company, shareholders’ liability is limited to the amount invested in the company. As such, the personal assets are protected from company debts. A business can be started with one director and one shareholder, who can be individuals or legal entities.
2. Public Limited Company
This business structure is typically for large companies, who wish to list shares on the stock exchange and raise capital from the public. Just like with a private limited company, shareholders’ liability is limited to the invested amount. Requiring a minimum of two directors and two shareholders, the structure goes through stringent reporting and governance procedures.
3. Limited Liability Partnership (LLP)
Another business structure which can be opted for company formation in UK is Limited Liability Partnership (LLP). It combines the characteristics of a partnership and a limited company to offer flexibility for conducting business operations. The structure offers limited liability to the partners thereby protecting them from personal liability.
4. Sole Trader
The sole trader business structure is the simplest form where one individual owns and runs the business. While fewer formalities are involved, the individual is liable for all business debts. This is a common structure for small businesses or freelancers.
5. Branch of a Foreign Company
Foreign companies may choose to establish a branch in the UK to conduct business. The branch is not a separate legal entity from the parent company but operates under UK law.
What are the Advantages of Company Formation in UK?
When it comes to establishing a business in the UK, entrepreneurs and businesses can enjoy a number of benefits. Let us take a look at them:
- Business-Friendly Environment: The United Kingdom is known for its ease of doing business. From a straightforward company formation process to a transparent legal system, the country provides a system where entrepreneurs and businesses can flourish
- Access to Global Markets: Setting up a company in the UK enables the business to have access to major international markets, which includes the European Union, the US, and emerging markets.
- Limited Liability Protection: Another advantage of company formation in the UK is that in the case of business failure, personal assets are safeguarded with businesses have the option of choosing a business structure
- Tax Advantages: Competitive corporate tax rate as well as various tax incentives, such as research and development (R&D) tax credits supports the business to focus on scaling.
- Skilled Workforce: Given the importance of having a good team of professionals, it is necessary to have access to a skilled workforce. In that regard, the UK stands up as you can handpick the best talent for your business.
Steps for Company Formation in the UK
The process of setting up a company in the UK is straightforward and can be completed in a few steps. Listed below are the involved steps:
The first step is to choose a company name that is unique and appropriate. While choosing the name, you must adhere to certain rules. This includes searching the Companies House database for availability of the chosen name, not being identical, and containing non-offensive words.
Based on your business needs, decide on the company structure that best suits your business.
The next step involves registering the business in the UK with Companies House, the government agency responsible for maintaining company records.
Once the company is established, you must register for taxes with HM Revenue and Customs (HMRC). Depending on the type and size of the business, you may be required to register for corporation tax, VAT (Value Added Tax) and PAYE (Pay As You Earn).
After registration, you need to open a business bank account for managing the company's finances.
Once the above mentioned steps are completed, the company must fulfil certain requirements to maintain the legal status.
Which Documents are Required for Company Formation in UK?
- Copies of MoA and AoA
- Copy of Form IN01 (Company Registration Form)
- Copy of From SH01 (Statement of Capital)
- Proof of registration fee payment
- Details of shareholders and directors of the company
- Identity proof of shareholders and directors
- Details of registered office space in the UK
- Details of Share capital (if applicable)
What our clients say
Thanks to Gryffin Capitalist, starting my business in the UAE was smooth and efficient. They offered advice on company formation and licensing and assisted in opening a bank account.
Starting a business in the UAE seemed complicated, but Gryffin Capitalist made it seamless. The team is very knowledgeable, professional, and responsive.
I had a great experience registering my company in the UAE with Gryffin Capitalist. The Gryffin Capitalist team assisted in selecting the right Emirate to complete all legal steps.
Why Choose Gryffin Capitalist?
As you can understand now, setting up a company in the UK involves a straightforward and efficient process. The country offers a wealth of opportunities for entrepreneurs and businesses irrespective of the fact whether you are a local entrepreneur or an international investor. The government and the involved authorities provide a solid legal framework, transparent regulatory environment, and a wealth of resources to support business growth.
We at Gryffin Capitalist can help you with streamlining the entire process and get the business up and running in quick time and a hassle-free manner. Do reach out to us today to learn more about our services and get started with company formation in UK.
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Frequently Asked Questions (FAQs)
Yes, the UK authorities allow 100 percent foreign ownership of the business established in the UK. However, for that you need to fulfil the criteria of having a UK-registered office address.
The time taken for business registration in the UK can range anywhere between 3 hours to 10 days.
The cost involved with company formation in UK varies on factors like mode of registration. As there are three available modes, the amount can fluctuate depending on the chosen mode and the services availed.
The UK authorities allow the formation of a dormant company. This type of company doesn’t have significant accounting transactions and is mostly used to reserve a company name for future reference.
Yes, closing the business is possible provided all the mentioned guidelines for doing so are fulfilled. To close the company, you are required to apply by filling the DS01 form.
