If you are thinking about incorporating a limited or unlimited company in the United Kingdom, it is always a good idea to consult experts who are knowledgeable on the topic. To help answer some of your most basic questions about company formation, we have compiled a quick list of the most frequently asked questions related to company formation and incorporation.
What Is ‘Companies House’?
Companies House is a government agency in the UK that is responsible for recording and maintaining all records regarding the incorporation of all UK companies. The chief officer of Companies House, the Registrar of Companies, has the power to investigate companies and prosecute directors who do not follow the Companies Act.
Are Companies in the United Kingdom Limited by Shares or Guarantee?
In the UK, private companies must be incorporated with the Companies House as either:
- Limited by shares; or
- Limited by guarantee
Limited shares companies are the most common here in the UK, as it is the best choice of structure for businesses that plan to make a profit and distribute those profits amongst company owners. Companies that are limited by guarantee are typically charities and non-profit organisations.
Am I Able to Set Up a Limited Company in the UK if I Do Not Live There?
You do not need to be a resident of the UK to set up a limited company in the UK. But there are a few rules about who can and cannot create a company in the UK.
- Directors or shareholders do not need to be a shareholder though your registered address must be within the UK
- Individuals who are bankrupt cannot act as the director of a UK company
- Individuals under the age of 16 cannot act as a director
If you live overseas and do not have a UK address, you will be able to provide a registered office address which you can use as your own.
What Are the Benefits of Registering a Company in the UK?
The reason why so many individuals choose to register their companies in the UK is because of the benefits that come with it. Here are some of the most prominent benefits.
- Incorporating a company in the UK is much less expensive than in several other countries
- The UK has no minimum capital requirements
- Your company can be incorporated with only one director and one shareholder
- The incorporation process is much faster than other areas, taking only a few hours
- You do not need to hire a notary, magistrate, or solicitor
Does My Company Need to Be VAT Registered?
Though there is no one answer to this, any company trading in the UK with annual taxable supplies exceeding £73,000 has to register for VAT. Companies can also register voluntarily, after which point they can then charge VAT on their products and services which they may be able to reclaim in the future.