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INCORPORATE IN THE UNITED KINGDOM ONLINE! OFFERING ASSISTANCE IN FORMING UK PRIVATE COMPANIES, PUBLIC COMPANIES AND ESTABLISHING LIMITED LIABILITY PARTNERSHIPS. WHY ESTABLISH A BUSINESS IN THE UK?

United Kingdom has a minimum of business formalities for establishing a business. The UK favours foreign investment. There are no exchange controls or restrictions on the introduction of capital or the repatriation of capital and profits and there are no currency regulations. Private limited companies can be formed very rapidly and easily. There are many subsidies and grants for businesses in particular areas ("Enterprise Zones", "Development Areas", "Intermediate Areas", etc.) with grants available from the UK Government and the European Union and other European institutions.

The current rates of UK Tax are low in comparison with many other western countries. The UK has double taxation agreements with many other countries. The procedure for registering a foreign branch is similar to incorporating a local company but registration expenses are slightly less than that for incorporating a local company. Any person who wishes to register a branch of a foreign company is advised to engage a professional, e.g. a lawyer or an accountant to assist him in the preparation and filing of the application for registration via Coddan CPM. If a foreign corporation does not wish to be required to register as carrying on business in United Kingdom, it may be possible to establish a representative office to engage only in activities which do not amount to, or form part of, the carrying on of the relevant business in United Kingdom. For example, having a nominated person employed by a local affiliate to handle enquiries could fall into this category.

Dear Visitors, If you want to become familiar with the description and the contents of companies establishment packages, offered by Coddan CPM LTD and to find above, what kind of service is included in this or that new business incorporation package, to get an idea about the price of annual renewal of the service, and about the general legal requirements to the company registration within United Kingdom, please, select the package you need from the list, situated below the banner. The information in the banner will be renewed according to the package you've chosen.

Finding and Using Information:    Types of Business Entities  |  Companies Limited by Shares  |  Public Companies  |  Flat & Property Management Companies  |  Guarantee Companies  | How To Convert Private Limited Company to a Public Company  |  Pros and Cons of Registering a Limited Company  | 

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Coddan is one of the foremost and most economical providers of British companies formation and Scottish companies registration services. We offer you company creation service in England & Wales Scotland and Northern Ireland. We incorporate over 95% of our companies within 6 hours. Electronic submission of information means that we can set-up a company with the required director, secretary, registered office and shareholders.

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With our new online electronic company registration services you now have more choice on how we form your UK Limited Company. You no longer need to have us acting on your behalf as nominee company officers and shareholders. We can form your limited company with your own directors, company secretary and shareholders etc., right from the start of your limited company formation. We will need more information from you to start the formation of your limited company but this means you have a lot less paperwork to sort out after the company has been formed and it will make the opening of your limited company bank account easier.

Purchasing a company and taking on the responsibilities of being a director and/or secretary may be one of the most important choices of your business life. Before commencing, all clients are advised to consider the advantages and disadvantages of a limited company compared to either a sole proprietorship or partnership. When running a company there is generally a little more bureaucracy to manage, but in most cases this is redressed by the protection given to personal assets.

The primary advantage of these entities is that they are all based on the simple principle that the liability of the shareholders/subscribers and officers is strictly limited to their direct investment in the company. Generally, the only exceptions are when some kind of fraudulent or grossly reckless act or omission has occurred involving the aforementioned. It is important to note that the 'innocent' shareholder without any involvement in the malfeasance will not lose the benefit of limited liability. Most common type of company in the England & Wales; straightforward limited company formation process. The principal purpose is to earn profits for the shareholders who may or may not be the same as the Director(s) or Secretary.

Live Help » Live Help is a real time "chat" feature which enables you to interact with a customer service representative without a phone call. Get answers to your questions while using our website. Clicking the "Live Help" button will start an on-line session with one of our representatives. Live Help is currently available during normal business hours. Outside of the above opening hours our business center will be closed. When you click on the button you will see an e-mail form that will allow you to send us a mail with your questions. Live Help is absolutely free! There are no hidden fees. We offer the service as a courtesy to our website visitors. Dear visitors, while having a chat session with a customer, we are frequently requested to give a piece of advice on tax planning or business structuring. We would like to inform you that it is against our principles to provide online advice pertaining to these issues. The points that may be covered during a session include service description, package or service price, navigation at our website, ways of making an order, methods of payment etc. Yet, if you wish us to provide you with advice on tax or business structuring, you should be aware that this service is chargeable. If you have any questions about the company establishment then please E-Mail or call us: 0800 081 1510 or +44 (0) 207 637 3881, fax: +44 20 7681 3318.

INTRODUCTION:

This guide is intended only as a summary since the United Kingdom has complex legislation on company law, tax law, employment law, property law and laws relating to the environment, banking and financial services. It is not possible in a short publication of this sort to cover such matters in detail. The guide is however intended to give individuals or organisations who are considering investing in the United Kingdom a general understanding of the relevant legal points. Any questions on particular matters should however be the subject of professional advice.

LEGAL FORMS OF BUSINESS:

Limited Company. Private limited company. We offer a choice of limited company formation packages to suit your practice requirements. We do not cut costs on expertise and quality but still maintain a cost effective pricing structure. Many agents say they provide these items but will only actually complete them at an extra cost! Let Coddan CPM LTD incorporate your business today. All you'll need to do is fill out our online order form, and we'll take care of the rest. Prices starting at £32.00 for complete company incorporation with a FREE online company name check. Then when your new limited company has been formed you will receive by email, your new limited company certificate of incorporation, your new limited company's memorandums & articles. The company certificate will be sent out in PDF format and your M&A's, these can then be printed as required. (E-Quick UK Company Formation Package - £32.00. Complete. No Registration Fees or Any Other Hidden Charges.) Since the Companies Act 1989 it is now possible to have a single shareholder. There is no minimum capital requirement. A private company can convert itself into a public company and vice versa.

Public limited company. These are usual for large enterprises, however they need not necessarily be quoted on the Stock Market or any other market. There is a minimum capital requirement of £50,000 of which 25% must be subscribed and paid up.

Subsidiary company. An overseas company may choose to form its UK investment through a subsidiary company formed in the United Kingdom. Alternatively a subsidiary can be formed in an overseas jurisdiction and a branch of that subsidiary can be established in the United Kingdom.

Branch. An overseas company may establish a branch in the United Kingdom. This is not a separate legal personality but merely an extension, or office of the overseas business. The branch will be required to register at Companies House (within one month of establishment) as an overseas company, filing annual accounts and details of directors and secretary. This information will be available to the public for inspection. One way of reducing such disclosure would be to form a subsidiary in another country, which then establishes a branch in Great Britain so that only details of the subsidiary need be disclosed.

Place of business. A place of business is a premises where there is a physical or visible indication that the company may be contacted there. An overseas company also has to register if it habitually conducts business from a particular location in Great Britain even if there is no physical sign of the company's connection with it.

Other forms of company. It is possible to form companies limited by guarantee or unlimited companies, but this is beyond the scope of the present summary.

Partnerships consortia and EEIGs. It is possible for individuals (or companies) to form partnerships in the United Kingdom but these are usually used for particular purposes which are beyond the scope of the present summary. Consortia are frequently used by construction companies when jointly tendering for construction work. An EEIG is a creature of European Union law and is intended as auxiliary to the principal activities of its own members (e.g. distribution, research and development, marketing, construction projects etc.). An EEIG should not create profits on its own account and in the UK its members are taxed as if they formed part of a partnership.

CHOOSING A LEGAL ENTITY:

A limited company is registered at Companies House. It must operate within the Companies Acts and is governed by its own memorandum and articles of association. There are different types of limited company but they all have these qualities.

Every company has a constitution in the form of memorandum and articles. A company must have both directors and members. (Members are shareholders unless the company is limited by guarantee). Once registered a company has corporate personality. It is a legal entity (or legal person) with its own legal rights and obligations, separate and distinct from those of its members. The company's property is its own and is not treated as belonging to the company's shareholders and directors. The company itself can enter into contracts, employ people, sue and be sued and can be liable if it commits criminal offences.

The key feature of a limited company is that it offers limited liability to its members. The company (as a separate legal entity) is liable for its debts and the members and directors are not personally liable (unless they have acted wrongly in some way). The members' liability is limited to paying for their shares.

PRIVATE COMPANIES LIMITED BY SHARES:

The vast majority of trading companies are private companies limited by shares. There are over one million such companies registered at Companies House. Such a company must have the word 'Limited' or 'Ltd' at the end of its name.

Many private companies are very small. There is NO minimum capital requirement in respect of a private limited company and it is commonly less than £100. Approximately 90% of private companies are small or medium sized companies which means that they can file modified (i.e. simplified) accounts at Companies House, rather than full accounts.

A private company may not offer shares or debentures to the public Companies Act 1985, sec. 81, only a public company (PLC) may do so. Every company must deliver an annual return to Companies House within 28 days of its made-up date. A company's director(s) and secretary are responsible for ensuring that the annual return:

Is delivered to Companies House within 28 days after the anniversary of incorporation or the anniversary of the made-up date of the last annual return; and gives a true picture of the management structure and capital (if applicable) of the company at the made-up date. Remember: It is a criminal offence not to deliver the company's annual return within 28 days of the made-up date, for which company secretaries and directors may be prosecuted.
How to Incorporate a LTD Company:   Click Here for More Details

PUBLIC LIMITED COMPANIES (PLC):

A small proportion of companies are public companies. Such a company must have a name ending in the words 'public limited company' or 'PLC'. This type of company is appropriate for larger businesses where shares are intended to be available to the general public. Most public companies are not set up as such but are converted from private ones.

For Public Limited Companies you must appoint a minimum of TWO directors (plus a Company Secretary). A public company must have a minimum authorised share capital of £50,000, of which at least one-quarter plus any share premium must be paid up before the company starts trading: Companies Act 1985, sec. 11, sec. 118, sec. 101.

A PLC must have an issued share capital of not less than fifty thousand pounds of which a minimum of 25% must be fully paid up. Shares cannot be issued for an undertaking to do work or perform services, payment for shares may only be by 'cash' or a 'non cash' consideration. The latter method would normally be in respect of a property or other tangible asset and completed within 5 years of the allotment. A PLC is not obliged to float its shares or offer them for sale, and it can remain as private as the shareholders wish and as with private limited companies if the shares have been fully paid there is no shareholder liability. A PLC enjoys increased status because of the larger capital base. A PLC requires two shareholders and two directors one of whom may also be the company secretary. A company registered as a public company on its original incorporation cannot commence business or exercise its borrowing powers unless the Registrar has issued it with a certificate of entitlement to do business and borrow (the trading certificate) which normally takes approximately two weeks to process.

This is the only type of company which may raise capital by offering securities (shares or debentures) to the public. This is usually done by obtaining a listing on the Stock Exchange. Public companies are subject to more stringent legal requirements than private companies on a wide range of matters, but especially in relation to share capital, directors and accounts.
How to Register a PLC - Public Company:  Click Here for More Details

PROPERTY MANAGEMENT COMPANIES:

A property management company is a type of private limited company. Such a company will be set up in order to hold an interest in property which is being divided into units, each unit being owned separately. A typical example is a large house which has been divided into a number of flats, each flat being owned by one or two people. There will usually be a need for somebody to own the building as a whole, including common parts such as stairways, gardens, access paths etc. Unless there is a landlord retaining this interest, the simplest legal device is for a company to be set up to own the freehold of the property, and for each owner of a flat to have an interest in the company.

Some property management companies will do no more than hold the title to property and so can be considered as dormant companies under the Companies Acts, allowing pro forma dormant company accounts to be registered at Companies House. This helps keep administration costs to a minimum and is useful where the property is small with little or no routine maintenance which can be arranged between the owners of the flats without involving the company.

A Flat Management Company has its Memorandum and Articles of Association specially drawn up to allow the company to own, manage and administer the property, which is normally divided into several dwellings, units or flats. When a property is divided into a number of flats, each flat owner has a lease of their own flat but they may also hold shares in a management company that owns the freehold (or lease) of the entire building.
How to Incorporate a Property Management Company:   Click Here for More Details

COMPANIES LIMITED BY GUARANTEE:

A company limited by guarantee is private company, very like a private company limited by shares, but it does not have a share capital. It is widely used for charities, clubs, community enterprises and some co-operatives. The vast majority of such companies are non-profit distributing, but they do not have to be.

A company limited by guarantee is registered at Companies House, has a set of memorandum and articles, directors, etc and is subject to the requirements of the Companies Acts (except those relating to shares). There are no shares and so no shareholders, but such a company does have members, who meet and control the company through general meetings. The directors are often called a management committee or council of management, etc but in law are still company directors and subject to all the rules that affect other directors.

A company limited by guarantee confers limited liability as effectively as a company limited by shares. The memorandum states that the members of the company guarantee to pay its debts, but only up to a fixed amount each. Usually that sum is £1.00, and no member can be liable for more than that amount if the company fails.
How to Register a Guarantee Company:   Click Here for More Details

UNLIMITED COMPANIES:

Many people refer to a sole trader's business or a partnership as an unlimited company, but such businesses are not in fact companies. It is possible to register at Companies House a private company which is unlimited, that is the members accept complete liability for the company's debts. If the company needs money to pay its debts a call can be made on each of the shareholders to contribute a fixed amount on each hare held by them.

An unlimited company has all the other features of a private company limited by shares. It is registered at Companies House, has members, directors, memorandum and articles, etc. Its one major advantage is that it is not required to register annual accounts at Companies House.

CONVERSION FROM ONE TYPE TO ANOTHER:

A private company limited by shares can be converted into a public company and vice versa, or to an unlimited company. An unlimited company can be converted to a private company limited by shares. A company limited by guarantee cannot be converted to a company limited by shares or vice versa.

CAN A COMPANY BE CONVERTED FROM ONE TYPE TO ANOTHER?

A company can be converted from one type to another by re-registration within the terms of the Act. There are procedures for re-registration from private to public and vice versa and from private limited by shares to unlimited and vice versa. There is no provision for a company limited by shares to be re-registered as one limited by guarantee or for the reverse process and there are restrictions on a company which has previously changed from limited to unlimited or vice versa changing back again.

On re-registration the company keeps its original company number and remains the same corporate identity. Re-registration does not affect any existing rights or liabilities of the company.

PRIVATE COMPANY RE-REGISTERING AS PUBLIC:

By Companies Act 1985, sec. 43 a special resolution must be passed providing that the company be re-registered as a public company and that the necessary amendments are made to its memorandum and articles. The special resolution is sent with an application on form G43(3) signed by a director or secretary together with the following documents: memorandum and articles as amended; a statement by the auditors that in their opinion a balance sheet prepared as at a date not more than seven months before the application shows that the company's net assets were not less than the aggregate of its called-up share capital and undistributable reserves; a copy of that balance sheet with a copy of an unqualified auditor's report; if any shares have been allotted other than for cash since the balance sheet date, a valuation report on the assets accepted as consideration for the shares; a statutory declaration on form G43(3); by a director or secretary of the company that: the special resolution has been duly passed; the nominal value of the company's allotted share capital is not less than the authorised minimum of £50,000; each allotted share is paid up to at least one-quarter of its nominal value and the whole of any premium; covering various matters relating to shares issued other than for cash (on which there are additional provisions); there has been no change in the financial position of the company between the balance sheet date and the application by the company for re-registration that has resulted in the company's net assets becoming less than the aggregate of its called-up share capital and undistributable reserves.

If the application is in order the company will be issued with a certificate of incorporation stating that it is a public company. On the date of issue of the certificate the company becomes a public company and the alterations to the company's memorandum and articles of association become effective.

Public company re-registering as private (Companies Act 1985, sec. 53, sec. 54, sec. 55). A special resolution must be passed that the company be re-registered as a private company and making the requisite changes to the memorandum and articles. Twenty eight days must lapse, during which time any dissenting members may apply to the court. Then an application on form G 53, signed by a director or secretary, must be sent to Companies House with the special resolution and a copy of the memorandum and articles as altered.

Members who oppose the proposed re-registration may apply to the court for cancellation of the resolution within 28 days (provided they did not vote in favour of the special resolution). Such an application may be made by any 50 members or by the holders of at least 5 per cent of the nominal value of the company's issued share capital (or any class thereof). The company must immediately give notice of any such application to Companies House on form G54. If the court makes an order canceling or confirming the resolution, an office copy of the order must be registered at Companies House. The court has wide powers on hearing such an application.

In the absence of any such application and if satisfied that the company may be re-registered, Companies House will issue a certificate of incorporation for a private company. The company then becomes a private company and the alterations in the memorandum and articles set out in the special resolution become effective.

Private limited company re-registering as unlimited. The following procedure is required for a private limited company to re-register as an unlimited company (Companies Act 1985, sec. 49): The company must send to Companies House an application on form G49 (1) signed by a director or secretary. The application must set out any necessary alterations in the memorandum and articles and it must be accompanied by: a form of assent on form G49 (8) (a) to the company being registered as unlimited, signed by or on behalf of every member; a statutory declaration by the directors on form G 49(8)(b) that all the members have signed the form of assent and that where the form was signed by an agent that they have taken reasonable steps to satisfy themselves that each agent was empowered to sign on behalf of the member; a copy of the memorandum and articles incorporating the alterations set out in the application. If the application is in order Companies House will issue a new certificate of incorporation and the alterations to the memorandum and articles will be as valid as if they had been adopted by special resolution: Companies Act 1985, sec. 50.

Unlimited company re-registering as a company limited by shares or guarantee. An unlimited company may re-register as a private company limited by shares or guarantee by following the following the procedures in Companies Act 1985, sec. 51. If it wishes to reregister as a public company, it must follow the procedures in sec. 48. It must pass a special resolution to be re-registered and stating whether the liability of the members is to be limited by shares or by guarantee and, if the former, the amount of the share capital. It must effect the alterations to the memorandum and articles.

The special resolution must be sent to Companies House with an application on form G51 signed by a director or secretary, together with a copy of the altered memorandum and articles. If the application is in order Companies House will issue a new certificate of incorporation. If the company goes into liquidation within three years after re-registration, any member of the company at the time of re-registration remains liable to contribute without limit to the assets of the company in respect of debts and liabilities contracted before it was reregistered: IA 1986, sec. 77.

Subsequent re-registrations. An unlimited company which was previously limited may not reregister as limited (sec.51(2)), nor may a limited company which was previously unlimited change back again (sec. 49 (2)).

HOW DOES LIMITED LIABILITY WORK?

The basis of limited liability is that all debts incurred by a company are the company's liabilities and not directly the legal liability of the shareholders or of the directors. The company is a separate legal person from the shareholders and the directors. The company incurs debts in the course of its business and only the company is liable for those. The shareholders' obligation is to pay the company for the shares they have taken in it. Once the shares are fully paid for (and this would usually be the case with a private limited company) no further money is payable by the shareholders.

The directors incur no personal liability as all their acts are undertaken as agents for the company. However, there are certain circumstances where liability may be imposed by the court, particularly in respect of wrongful or fraudulent trading.

WHAT ARE THE ADVANTAGES AND DISADVANTAGES OF HAVING A COMPANY?

Limited Liability. For many people this is the deciding factor. Starting a new business is often a risky venture, usually people are putting into the business their personal savings and often they are giving up secure employment to start their own firm. It is often important to them to know that their risk is limited to these amounts and that if the business fails they will not be liable beyond the amount of capital they have decided to put in. They can in this way protect their house and other personal assets from being sold to pay the business debts. Without such limited liability, the ultimate risk of business failure is personal bankruptcy.

The limited company will, however, operate subject to the following practical considerations: Bank Borrowing. If the company borrows money from a bank, the bank will automatically require the directors of the company to give personal guarantees (i.e. to contract that they will pay back the bank if the company fails to do so). The bank may also require security over the company's assets and/or the directors' personal assets (e.g. a mortgage - or second mortgage - on a director's house).

Landlords. A landlord may insist that if a small limited company is going to take a lease of premises the directors g