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Deluxe Plan |
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 £ 200.00 | Annual Maintenance Fee £200.00 | | |
 This package includes annual return, annual accounts, and general meeting reminders, and a dedicated administrator based in our office in London.
We will complete and file the annual return and certify the annual accounts on behalf of your company. This package is also includes the nominee secretary's signature on documents and preparation of a letter relating to the opening of a business bank account.  With this option we will provide the following service: -
 Providing members and directors with notice of general and extraordinary meetings;
Sending copies of resolutions and agreements to Companies House;
Supplying a copy of the accounts to every member of the company, every debenture holder and every person who is entitled to receive notice of general meetings;
Maintaining the statutory registers;
Keeping, or arranging for the keeping, of copies of all resolutions of members passed otherwise than at general meetings, minutes of all proceedings and general meetings;
Monitoring changes in share ownership of the company;
Ensuring that the company files statutory information promptly;
Monitoring changes in relevant legislation and the regulatory environment and taking appropriate action;
Developing and overseeing the systems that ensure that the company complies with all applicable codes as well as its legal and statutory requirements.
This service covers the cost of reasonable handling of official company documents, which will be sent via standard post, but does not include the handling of general trading or banking correspondence, nor the use of express or courier services.
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While the legislation does not generally specify the role of the company secretary, the company secretary might normally undertake the following duties: - Maintaining the statutory registers.
Monitoring changes in share ownership of the company.
Ensuring that the company files statutory information promptly.
Providing members and directors with notice of meetings.
Organising, preparing agenda for, and taking minutes of, meetings.
Dealing with correspondence before and after meetings, collating information, writing reports, ensuring decisions made are communicated to the relevant people.
Providing members with proposed written resolutions and auditors with any passed resolutions.
Sending copies of resolutions and agreements to Companies House.
Supplying a copy of the accounts to every member of the company, every debenture holder and every person who is entitled to receive notice of general meetings.
Arranging the general meeting and co-ordinating production of the annual report.
Keeping, or arranging for the keeping, of copies of all resolutions of members passed otherwise than at general meetings, minutes of all proceedings and general meetings.
Ensuring that people entitled to do so can inspect company records.
Monitoring changes in relevant legislation and the regulatory environment and taking appropriate action.
Developing and overseeing the systems that ensure that the company complies with all applicable codes as well as its legal and statutory requirements.
Custody and use of the company seal. Companies no longer need to have a company seal, but if they do, the secretary is usually responsible for its custody and use. (You can buy company seals from us.)
As the secretary is an officer of the company, they may be criminally liable for defaults committed by the company. For example failure to file - in the time allowed - any change in the details of the company's directors and secretary, and the company's annual return.
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Company Formation Home Page >> Starting and Doing Business in England >> Our Services for Non-UK ResidentsCOMPANY INCORPORATION SERVICE FOR NON-UK RESIDENTS AND NON-BRITISH NATIONALS. COMPANY FORMATION IN THE UNITED KINGDOM For decades, the legal, financial, and entrepreneurial communities have turned to Coddan for their incorporating needs. We provide reliable nationwide service. We register companies in London, Liverpool, Glasgow, Edinburgh, Belfast and Dublin, form corporations and LLCs in all 50 states plus District of Columbia. For just £42.00 we provide you with a complete UK company formation package, ready to begin trading usually in under three hours. Our prices include all Companies House fees and required documentation. We even have direct access to the Delaware Division of Corporations, so Coddan can have your DE business filed within 24-48 hours.
We are prepared and committed to serving our entrepreneurial-spirited clients quickly, professionally, and at the best rates available from any service company in the industry. We provide a wide range of corporate services including: formation of companies and limited liability partnerships, Internet domain name registration, registered address service and other small business services such as Mail Forwarding and Tax-On-Time.
 Finding and Using Information: Company Formations Requirements | Post Incorporation Services | Types of Business Presence | How to Incorporate a Private Company? | Alternative Business Models | What is a LLP? | How to Register a Branch or Establish a Place of Business |
Coddan has everything you need to incorporate your business to get your company off to a great start. When you incorporate on-line with Coddan, you save valuable time and money. Count on us to point your business in the right direction. Incorporate today! Questions about our company or our service? Please E-Mail or call us: Call FREE 0800 081 1510, Overseas Residents: +44 845 020 4269 or +44 20 7060 0382, Fax: +44 20 7681 3318.
If you're thinking about starting a new life abroad and forming a company to start your own small or home based business this article with provide you with some tips to set you on the right track to small business start-up success. There are a number of different ways in which an overseas company may set up a business presence in the UK. Depending on your business model, you may choose to acquire or merge with an existing UK business, register a limited company to create either a subsidiary or a joint venture vehicle, create a place of business or branch office, or use some other structure such as a partnership.
How to Become a Private Company » Click Here for More Details |
Company Formations Requirements:
Generally speaking, there are no restrictions on foreign ownership or control of a UK company or other business. However, there are a number of regulations and requirements which potentially impact the acquisition of a business. For example, the acquisition of a company whose shares are quoted will require compliance with the relevant regulations and codes on mergers and takeovers. Mergers and acquisitions which may have the effect of restricting competition will be subject to the various controls imposed by UK and European Union competition law. In all cases, the merger or acquisition will require detailed legal documentation.
If you live overseas, you must decide whether your British, Scottish or Irish company will trade it its own right (and pay tax in the United Kingdom) or if you will trade through a branch of the company registered in your country of residence. If you decide to open a local branch, you are likely to need special documents to satisfy the authorities that your company has a valid, current registration. In most cases, a registration authority will require a Good Standing Certificate showing your name as Director and Apostille to confirm the certificate's legal validity.
All UK registered companies are legally required to have a UK registered office address. It is the address of a company to which Companies House letters and reminders will be sent. The registered office address can be anywhere in England and Wales (or Scotland if your company is registered there). The registered office address must always be an effective address for delivering documents to the company, and to avoid delays it is important that all correspondence sent to this address is dealt with promptly. For UK companies owned by overseas residents it is a legal requirement to have a UK registered address where official government mail can sent.
We are able to offer Registered office facilities. Facilities are offered for 12 monthly periods. There is no refund of monies paid. The Registered office facility includes the forwarding of official post i.e. correspondence from HM Inspector of Taxes, Companies House etc. We will not forward other correspondence unless Full Post Forwarding has been selected.
The Registered Office facility provides for the forwarding of mail from Companies House and Inland Revenue but we are able to offer a full mail forwarding service. We will forward your mail to any address in the UK (or elsewhere), either at intervals you require or when it is received. You can also change your forwarding address as often as you like. This facility can be used on annual basis. We will use first class post in the UK and airmail elsewhere unless we are instructed differently.
Compare Prices of Various Forms of Companies » OK, Let Me Check Your Packages & Costs |
These documents can be ordered when you form your company or at a later date. However, it is not wise to order the Good Standing Certificate until your name has been registered at Companies House as a Director of your company. Some authorities may also require a translation of the company's Memorandum & Articles. If, however, they also require this document to be Apostilled, it will be necessary to have it legalised before applying for Apostille. Check the requirements with the authorities in the area where you live.
Post Incorporation Services:
Normally the formation or acquisition of a limited company at the beginning is a very quick and informal process. Of course the company will require professional advice and professional services during its development. Our consultants can help you to start-up your business and support it in many ways during its development. As ancillary services to the formation of UK companies, we can offer you the following services:
Nominee Directors from - £125.00
Nominee Company Secretaries from - £75.00
Nominee Shareholders from - £100.00
Registered Office from - £75.00
Maintenance of Statutory Registers and Filing of Annual Returns
Preparation of Special Resolutions from £50.00
Bank Introductions from - £250.00
Day-to-day Administration
Telephone Answering
Post Office Box
Computerised Book-keeping and Production of Periodic Financial Statements
Assistance with International Audit Requirements
Completion and Filing of Annual Returns from - £90.00
General Power of Attorney
Notarial and Apostille Services from £70.00
International Reinvoicing Services
If you want to become familiar with the description and the contents of non-UK residents limited company formation packages, offered by Coddan CPM LTD and to find above, what kind of service is included in this or that non-British nationals companies formation package, to get an idea about the price of annual renewal of the service, and about the general legal requirements to the company incorporation within Great Britain, 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. All of our Memorandum and Articles of Associations and Partnership Agreements were reviewed and approved by a volunteer U.K. lawyer.
When it comes to company formations, our service is both simple and quick to use. For just £42.00 we provide you with a complete company formation package, ready to begin trading usually in under three hours. The above package includes the estimated timescale for preparation of your documents. Your new limited liability company will usually be formed within 3-8 working hours from receipt of payment. If your package includes an apostille certificate this will usually add approximately 10 working days to the completion date.
With our new online electronic companies set-up system, we take you through each step of your private or guarantee (non-for profit) company formation process as quickly and as simply as possible. By providing 100% of the details online using a simple, well laid out process, you don't have to get tied up with complicated forms. After submitting, just sit back and wait for our email notification. You will be registered as the founding director and shareholder of the company, this means that you can open your doors for equity or debt financing from other sources since the company is actually registered in a real persons name who is responsible for the operations of the company.
We appreciate that not everyone likes to place orders over the Internet, preferring to place orders by phone, fax or even post. We are happy to take orders through any of these methods, but prefer to have the order in writing to avoid any possibility of error. This form can be completed on your computer (on screen) and then saved and e-mailed to us.
To Download This Offline Order Form Simply »  Click Here (Our printable order form is in Excel format. To download, click the right mouse button and "Save target as")
If you are seeking company registration services you may wish to enquire whether your proposed British company formation agent or English company formation system will be transferring an existing registered company (i.e. a shelf company) to you or forming a brand new company for you. If an existing company is being transferred to you, you will need to trust the company formation agent or other provider that the company hasn't traded before. We have many Shelf and Aged Companies (off-the-shelf), which are ready to trade, and can be transferred to you within hours.
Do You Need to Buy a Company Now? » Currently Available Shelf Companies |
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. Besides English, we have several customer service representatives who speak Spanish, German, Franch, Polish and Russian.
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.
UK COMPANY REGISTRATION. TYPES OF BUSINESS PRESENCE: | 
| 1. Private company subscribers MAY be residents outside the UK.
2. You MUST appoint a minimum of 1 Director.
3. Directors can be corporate bodies or private individuals.
4. A Director can be of ANY nationality.
5. All companies MUST appoint a Secretary.
6. A Secretary can be of ANY nationality.
7. If there is only ONE Director he or she CANNOT also be the Secretary.
8. There is no maximum and no minimum share capital.
9. There is no minimum share capital, no paid-in capital requirement.
10. The company is required to have a registered office in the UK.
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Can I have a registered office outside the United Kingdom? NO. You may have offices outside the UK, but the registered office for any company must be in the United Kingdom. This is a legal and administrative requirement. A correct copy of some documents must also, by law, remain at the registered office address.
What is a registered office? For the purposes of the official lodgement of papers (matters concerning the corporate entity, legal actions, notices, etc.) and to comply with the principle that people have a right to know with whom they are dealing, every company must have United Kingdom registered office. The address must be registered with Companies House under the Companies Act 1985 and 1989, and it is a requirement of every limited company. The registered office can only be within the country in which the company is incorporated although there are EU proposals that would allow a company to move its registered office within the EU. The registered address can be anywhere in England, Wales or Scotland (we are able to offer this service for Scottish companies), provided the company is registered in that country. The address of such office on registration and all changes thereafter must be notified to the Registrar (although it is not necessary to state the actual address as opposed to the country of registration in the Memorandum).
In common with registered limited companies in other jurisdictions, UK-registered limited companies are legal entities - they are treated as persons in their own right, separate from the directors who manage them and the shareholders who own them. This means that companies can bring and defend legal proceedings, earn money and incur debts, all on their own behalf. The shareholders' liability is usually limited to paying to the company the price they have agreed to pay for their shares, and it is only in very particular circumstances that a director or shareholder can be obliged to contribute to the assets of a company in the event it becomes insolvent. Companies are governed by the Companies Acts 1985 and 1989 (along with various subsequent amendments); these Acts set out the legal rules under which companies are run, and the limitations upon the actions and powers of shareholders and directors.
A company limited by shares may either be private or public. The difference between these types of companies depends upon how the company has been constituted. To be a public company, the company must: state that it is a public company in its constitution; include the words "public limited company" (or "plc") at the end of the company’s name; satisfy certain requirements as to the minimum amount of share capital. One of the major differences between a private limited company and a public limited company is that a public limited company may offer its shares for sale to the public through a recognised stock exchange. In contrast, a private limited company may not offer its shares to the general public. The rest of the information contained in this section applies to private limited companies. Specialist advice should be sought if you decide you want to set up a public limited company.
You May Use This Form to Set-Up a Public Limited Company » E-Quick PLC Incorporation Package  - £120.00 |
HOW TO INCORPORATE A PRIVATE COMPANY? Company registration in the United Kingdom is easy and straightforward. No permission is required to establish a business presence, although there is some regulation of the use of business and trading names. All companies registering in the UK are required to do so with Companies House and have to submit accounts as well as Annual Returns. When making a decision to proceed with a company formation, there are many points to consider seriously. When you proceed with a UK company formation, you will take on the responsibility of being a director and/or secretary. Therefore if you decide on a limited company formation, you need to weigh out every option and aspect, it's a very important decision and you don't want to make any mistakes, as this will affect the future viability of the limited company. In general there are very few legal requirements for overseas clients when forming a company. However, you will need to have the following:
Registered office address. This must be an actual address in the UK (England, Wales or Scotland), not a PO box or similar. We can provide you with a registered office facility in England, Wales, Scotland and Northern Ireland which includes forwarding of all official government mail overseas.
Appointing the directors of the company. How many? Every private limited company needs to have at least one director (and a secretary). There is no maximum limit to the amount of directors you can have. Companies must keep a register of directors and secretaries, which must be available for public inspection. Directors can be either an individual or corporate entity and there need only be ONE director to incorporate a company. There are no residency or nationality requirements for company directors. If there is only one director he or she cannot also be the secretary. However, if there are two, one can be secretary as well. There are no qualification requirements for either directors or secretaries.
Share ownership. Directors are not generally required to own shares in the companies that they manage, but there is nothing to prevent them from doing so, and they often do. Among other things, the directors are responsible for the management of the company. The directors are responsible for ensuring that the company does everything that it is obliged to do by law. All directors are personally responsible for ensuring that the accounts are prepared, circulated to the members (those who own the company), and delivered to Companies House on time. Make sure all of the directors understand their responsibilities.
Appointing the company secretary. What does a company secretary do? Every private limited company needs to have a secretary (and at least one director). The secretary is the chief administrator for the company. He or she normally takes charge of ensuring that any documents, which need to be sent to Companies House, are sent on time. The secretary can also be a director, and therefore have the same responsibilities as the other directors. If the secretary isn't a director, he or she is still is an officer of the company and is responsible for it's actions (with the exception of the companies accounts, which are the personal responsibility of the directors).
Who owns the company? The members. A company is owned by "the members", usually shareholders. How many? There is no maximum amount of shareholders in a private limited company. As long as the shares have not been offered to the general public. It is possible for a company to have just one member, and for that member to have only one share.
Is there a minimum amount of capital required to form the company? There is no statutory minimum or maximum capital for a private limited company, (although a public limited company has to meet certain capital requirements).
How much is there to lose? A company may have limited liability for its members. The effect of this is that, if a company is unable to pay it's debts and is put into liquidation, the members will not be required to contribute more than they have actually paid, or agreed to pay, towards settling it's debts. A private company can be limited by shares or by guarantee, (which is a commitment to contribute a given sum if the company is wound up). E.g. your bank may ask for a directors' personal guarantee on a company's loan.
Apostille of company documents. For UK company documents to be recognised outside of the United Kingdom they must be issued with an Apostille certificate. This certificate verifies the UK documents to be legal and removes the need for further proof of authenticity. We provide the service to obtain an Apostille certificate for any document produced in the UK.
We strongly advise you consider ordering this service from Coddan at the time of incorporation of your new limited liability company. The Apostille can be arranged at a later date but we would normally charge our standard prices. If your company documents do not include an apostille you may experience problems with non-UK authorities in the future. For example non-UK banks or courts will require legalised documents before recognising your company as a legitimate UK business entity. This could potentially cause problems and delays that could be damaging to your business.
You May Use This Form to Incorporate a New Company » E-Quick Incorporation Package - £42.00 |
ALTERNATIVE BUSINESS MODELS FOR FOREIGN INVESTORS: In addition, investors can also establish a business presence in the UK through the setting up of a branch or place of business of the overseas company statutes and partnerships.
Partnerships. Individuals, including overseas investors, can set up as a partnership in the UK. The partners are jointly and severally liable for all debts. This means that if some partners cannot be made to pay their share of any debts, the other partners become liable in addition to their share.
Limited partnerships.
A limited partnership consists of: one or more persons called general partners, who are liable for all debts and obligations to the firm; and one of more persons called limited partners, who contribute a sum or sums of money as capital, or property valued at a stated amount. Limited partners are not liable for the debts and obligations of the firm beyond the amount contributed. A limited partnership must be registered under the Limited Partnership Act of 1907. To register, you must deliver a statement (Form LP5), signed by all the partners, to Companies House.
Limited partners may not: draw out or receive back any part of their contribution to the partnership during its lifetime; or take part in the management of the business or have power to bind the firm. An overseas limited partnership usually cannot usually register in the UK because its main place of business has to be in the UK, and an overseas partnership would generally do most of its business abroad.
A limited partnership consists of one or more persons called general partners, who are liable for ALL debts and obligations of the firm; and one or more persons called limited partners, who contribute a sum or sums of money as capital, or property valued at a stated amount. Limited partners are NOT liable for the debts and obligations of the firm beyond the amount contributed.
What restrictions are there on the limited partners? Limited partners may not draw out or receive back any part of their contribution to the partnership during its lifetime; or take part in the management of the business or have power to bind the firm. If they do, they become liable for all the debts and obligations of the firm up to the amount drawn out or received back or incurred while taking part in the management, as the case may be.
Who can be a partner? Generally speaking, an individual or a legal body such as a company may be a partner in a limited partnership, either as a general or as a limited partner. A person cannot be both a general and a limited partner at the same time.
Must limited partnerships register? Yes. Until your partnership is registered, it will be regarded as a general partnership with both the general and limited partners jointly and severally responsible for any debts and obligations incurred.
Can an overseas limited partnership register? Not usually. The Limited Partnership Act requires partnerships to register in that part of the United Kingdom where their principal place of business is situated or is proposed to be situated. An overseas partnership usually has its principal place of business overseas, and would not be registered for that reason.
Can I choose any name I wish for my partnership? Not entirely. No name will be registered that is the same as that of a limited company, other legal body, or another limited partnership already on the register at Companies House. In addition, the names of limited partnerships are controlled by the Business Names Act 1985. Also the use of certain names is an offence under certain Acts. In particular, it is an offence for a person who is not a public company to use a name ending in 'public limited company' or its Welsh equivalent, and it is also an offence for any person to use a name which ends with 'limited' or its Welsh equivalent, unless duly incorporated with limited liability (see sections 33 and 34 of the Companies Act 1985).
Is there a limit on the number of partners? A limited partnership may not normally consist of more than 20 persons. However, under section 717 of the Companies Act 1985 there are a number of exceptions to this rule, including: a partnership carrying on practice as solicitors and consisting of persons each of whom is a solicitor. A partnership carrying on practice as accountants where the partnership is eligible for appointment as a company auditor. A partnership carrying on business as members of a recognised stock exchange and consisting of persons each of whom is a member of that exchange. A partnership carrying on business as surveyors, auctioneers, valuers, estate agents, land agents, or estate managers and consisting of persons of whom at least three-quarters are members of the Royal Institute of Chartered Surveyors or the Incorporated Society of Valuers and Auctioneers and of whom not more than one-quarter are limited partners.
A partnership carrying on business as insurance brokers and consisting of persons each of whom is a registered insurance broker or an enrolled body corporate. (For the meaning of 'registered insurance broker' and 'enrolled body corporate' see section 29(1) of the Insurance Brokers (Registration) Act 1977.). A partnership which is a collective investment scheme the operator of which, or the manager of the investments of which, is an authorised person under Part IV of the Financial Services and Markets Act 2000 or a European Economic Area firm or a Treaty firm with permission under the Act to operate the scheme or manage the investments.
What if some of my partnership details change? If any alteration is made to any of the details previously registered, Companies House must be notified of the change within seven days.
Do I have to publish any details of the partnership? The Business Names Act 1985 requires all businesses trading under names other than those of their owners to display their owners' names and an address at which documents can be served. This information must be displayed both at business premises and on business stationery. It must also be supplied in writing at the request of any person with whom you are doing business. Where the partnership consists of more than 20 persons certain exceptions apply to the business stationery requirements.
Can a limited partnership be dissolved? Yes. In the event of the dissolution of a limited partnership, the general partners must wind up its affairs unless the court orders otherwise. Subject to any agreement between the partners, a limited partner is not entitled to dissolve the partnership by notice, and the other partners are not entitled to dissolve the partnership merely by reason of any limited partner suffering his share to be charged for his separate debt. The death or bankruptcy of a limited partner is not a ground for dissolution. The fact that a limited partner is a 'person of unsound mind' is not a ground for dissolution of the partnership by a court, unless the person's share in the partnership cannot be otherwise ascertained and realised.
Who must deliver these particulars? The general partners are responsible for the delivery of particulars whether or not the preparation of the documents was delegated to accountants or to anyone else.
The Limited Partnership Act 1907 provides for the imposition of penalties for various defaults in carrying out the requirements of the Acts and for failing to send to the Registrar the required forms. Notice of any arrangement or transaction under which a general partner will become a limited partner in the firm must be advertised in the London, Edinburgh or Belfast Gazette, as the case may be. Notice must also be advertised in the Gazette of any arrangement or transaction under which a limited partner's share in the firm will be assigned to somebody else. Until this is done these arrangements or transactions have no effect.
Limited Liability Partnership (LLP).
Non-UK residents can now, in certain circumstances, use a LLP as a tax-efficient vehicle for international trade. This is in much the same way as non-UK resident companies were used prior to changes in the law for company residence tests in 1988. A new form of association/partnerships with limited liability became available when The Limited Liability Partnerships Act 2000 came into force on 6 April 2001. An LLP is an alternative corporate business vehicle that gives the benefits of limited liability but allows its members the flexibility of organising their internal structure as a traditional partnership. Any new or existing firm of two or more persons will be able to incorporate as an LLP. Limited Liability Partnerships will have similar disclosure requirements to a company including the filing of accounts.
A Limited Liability Partnership, or "LLP", is not a partnership in the true sense of the meaning of that word. However, an LLP has certain characteristics which identify it as being at least a cousin of the limited partnership. The LLP is a true hybrid; for example, whilst an LLP is a separate legal entity (indeed, it is expressly stated to be a body corporate), there are no publicly filed constitutional documents. In international tax planning terms, the LLP represents both a backward and forward step. It is backward in the sense that it is now possible again for a UK incorporated entity to be managed and controlled from anywhere in the world, with few reporting requirements to the Registrar of Companies and, in certain circumstances, nominal reporting requirements to the Inland Revenue. It is a forward step in the sense that it gives international tax practitioners a UK alternative to the Delaware LLC.
The key characteristics of an LLP can be summarised as follows: an LLP is a separate legal entity under UK law; it is a body corporate. An LLP has unlimited capacity. All the members of an LLP have limited liability. All of the members of an LLP can, and commonly will, participate in the carrying on of the LLP's business. The relationship between the members themselves and the members and the LLP may be governed by a written membership agreement; any such written agreement will be a private document (i.e. there is no requirement to file it with the Registrar of Companies). So long as the LLP is carrying on a trade, profession or other business with a view to profit, it will be fiscally transparent for income tax and capital gains tax purposes. Annual returns and annual accounts must be filed with the Registrar of Companies. An annual tax return will need to be filed with the Inland Revenue, but if the LLP does not carry on any trade in the UK through a permanent establishment and has no UK source income, this will be a nil return.
For an LLP to be incorporated, there must be at least two persons associated for carrying on a lawful business (which includes an investment business) with a view to profit. Those two persons can be individuals, companies, trustees, partnerships etc., and they can be resident anywhere in the world. The process of incorporating an LLP is similar to that for a limited company. An LLP is incorporated by delivering an incorporation form, which contains details of the name of the LLP, the legal domicile (i.e. England and Wales or Scotland) of the LLP, the names and addresses of each of the members (including the designated members) of the LLP and the registered office address of the LLP, to the Registrar of Companies.
A small incorporation fee must also be paid. An LLP does not have an equivalent to a company's Memorandum and Articles of Association. Members may (and should) put in place a written membership agreement to govern the relationship between the members themselves and the members and the LLP; this will remain a private document. In the absence of express agreement on particular issues, certain default statutory provisions will automatically apply to the LLP.
There is no limit on the maximum number of members, although there must be at least two formally appointed members at all times. Members are divided into two categories, namely designated and non-designated members. The duties imposed on designated members are similar to those that would normally be placed upon a director or secretary of a company limited by shares or guarantee. These are additional to the duties every member has to the LLP and include appointing auditors, signing and delivering accounts and annual returns to the Registrar of Companies, notifying the Registrar of Companies of changes to the LLP (including changes in membership, name or registered office address) and acting on behalf of the LLP if it is wound up and dissolved.
An LLP must have at least two members with designated member status. In the event that an LLP has no designated members, or only one, every member of the LLP is deemed to be a designated member. Changes to the designated or non-designated status of any member can be made at any time with the agreement of the other members, provided that the minimum requirement of having at least two designated members is always complied with, and the relevant changes are notified to the Registrar of Companies. Whilst an LLP carries on a trade, profession or other business with a view to profit, it will be (in common with general partnerships and limited partnerships) fiscally transparent for income tax and capital gains tax purposes. The profits (and losses) of an LLP will be directly attributed to its members, in accordance with the terms of the profit (and loss) sharing arrangements set out in any oral or written membership agreement, subject only to statutory adjustments in respect of, for example, relief for losses.
Income and capital gains are therefore treated as income and gains of the members, as set out in the Members' Agreement. If the members are not resident in the UK and the income and gains are not from a UK source or trade, then they will have no UK tax liability. There are some anti-avoidance provisions to ensure that a LLP is not used to mitigate UK tax that might otherwise be payable. In particular, whilst they can be suitable for international trade, they should not be used for investments or property holding as specific anti-avoidance legislation is being introduced to counter their use in these circumstances. Furthermore, the profit (and loss) sharing ratios can be changed at any time and, if care is taken, any such change can be effected without adverse UK tax consequences for the affected members.
That being so, if all of the members of an LLP are non-UK resident, and the LLP does not carry on a trade in the UK through a permanent establishment and has no UK source income (but it carries on a trade, profession or other business, including an investment business, wholly outside the UK), there will be no income, profits or gains to charge to UK tax and, therefore, the annual tax return will be a "nil" return (indeed, it may be possible to convince the Inland Revenue to overlook the requirement to file an annual tax return if it will always be a "nil" return).
Finally, it should be noted that section 267A, Inheritance Tax Act 1984 ("IHTA 1984"), states that, for the purposes of inheritance tax, members of an LLP own the property of and carry on the business of the LLP, and any dealings between the members and the LLP are simply dealings between the members themselves; in other words, an LLP is fiscally transparent for inheritance tax purposes as well. This is different to the approach taken for the purposes of inheritance tax in respect of interests in general and limited partnerships.
The liability of the members of the UK LLP is limited to any agreed capital contribution. No minimum capital contribution is prescribed so this could be zero. It must have at least two members. These may reside anywhere in the world and may be bodies corporate registered in the UK or elsewhere. In particular, the rules relating to the LLP Agreement that governs the relationship between the members leaves them free to determine their relationship within the LLP. This is in contrast to the limited company, in which the relationship between the directors and shareholders is strictly defined and governed by the Companies Act 1985 and related legislation, and the common law. The Agreement is not filed on the public record.
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WHAT IS A BRANCH? WHAT IS A PLACE OF BUSINESS? Instead of setting up a new UK limited company, it is possible simply to open a branch office in the UK. It is alternatively possible to register a "place of business" with even less formality. Companies can of course carry on business in the UK without needing any corporate presence in the UK - simply shipping goods into the UK from abroad will not necessarily require the non-UK company to have a presence there. Equally, a company could carry on business in the UK via an agent, franchisee or distributor. However, any non-UK company with a physical presence in the UK (other than as a UK registered company) is required to register either a branch office or a place of business. Registration as a branch office is appropriate where this is essentially part of an overseas company which is organised to carry on business through local representatives in the UK rather than referring it abroad. Registration as a place of business is appropriate where its activities in the UK are not sufficient to define it as a branch. Such activities might include internal computer processing, warehousing, or simply a representative office.
A branch (which constitutes a permanent establishment) is chargeable to Corporation Tax on its annual profits and on capital gains (at the Corporation Tax rate) arising on the disposal of any asset situated in the UK, which is used for the purposes of the branch or its trade. A branch is entitled to the capital allowances on plant and machinery and industrial buildings in the same way as a UK resident company. A branch must register for VAT in the same way as a UK company and is in the same position for taxes on interest and royalties, save that any "interest" or other charges made against it by the overseas corporation of which it is the ranch will be ignored for UK tax purposes.
Every overseas company which is incorporated outside the United Kingdom (England and Wales, Scotland and Northern Ireland) and Gibraltar and which establishes a branch within Great Britain is required to register a branch. It is not necessary for an overseas company which has a branch to register under the place of business regime as well.
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An overseas company MAY HAVE more than one branch within Great Britain. If they each have management independence, each branch will require to be registered. If there is a main office to which the other offices report it is only necessary for the main branch to register. If two branches both report direct to the overseas parent both must register. The non-UK company's name is also a factor. Initially, the UK operation will be registered under the name of the non-UK company, but after this the UK operation will be subject to the same restrictions on company names as UK-registered companies.
A name will be unacceptable if the non-UK company has the same name as a company already registered in the UK, or has a name which is prohibited under the law (e.g. because it is offensive, or suggests criminal activity). In this case, the UK operation will have the opportunity to change its name to one which is acceptable; if it does not do this, it will be unable to conduct business in the UK under its original name. A branch office or place of business must make the following clear on all of its correspondence: the non-UK company's name and country of incorporation; that the liability of the members of the non-UK company is limited (if applicable); the place of registration and the registration number of the branch office (if applicable).
A place of business is a premise 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. An overseas company with a place of business within Great Britain which is not also a branch, must register with the Registrar of Companies in England and Wales or in Scotland. An overseas company with a place of business in England or Wales must register in Cardiff and an overseas company with a place of business in Scotland must register in Edinburgh. An overseas company with places of business in both England and Wales and in Scotland must register in Cardiff and Edinburgh.
When you decide to set up a business in the UK, you may decide not to do this alone. Whether for the purposes of increasing your local knowledge or to obtain new expertise or technology, you may wish to engage in a joint venture with another company. This may be a local (UK) company or another overseas company. Whatever the background, there are essentially two ways of doing this. You can set up a company or branch office and then simply have it work in partnership with the other company. In this case, you will simply follow the company incorporation procedures or branch office procedures and then enter into appropriate contracts with the partner company. Alternatively, you can create a joint venture company in which both you and the partner company have shareholdings, can appoint directors and so on.
These are often useful for joint research projects or where you wish to share risk with a third party. Joint venture companies have no special legal status; they are simply companies where two (or more) parties divide the shareholding and the board of directors between them. They do, however, tend to have specially-drafted Articles of Association, as it is necessary to place restrictions on how the company is governed. Typically they provide for much tighter restrictions on voting rights, and on share transfer rights (stipulating, for example, that shares can only be transferred to existing shareholders in the company pro rata to their existing shareholding). The balance of power in a joint venture company is a particularly important consideration. In many cases where there are only two parties, they will each have an equal shareholding.
This effectively means that all votes require unanimity since neither party can outvote the other. In certain circumstances, however, the parties may agree to unequal shareholdings. In this case, great care must be taken, when drafting the Articles of Association, to protect the rights of the minority shareholder; otherwise, he may find himself in a position where he cannot influence the running of the joint venture company. Non-competition restrictions are also a vital component of joint venture articles, particularly when entering into a joint venture with a local company. You will not want your partner company to be competing directly with the joint venture company and you may well wish to restrict the overlap between the two. However, competition (anti-trust) law is a sensitive and complex area in the UK and one which will require specialist legal advice.
Even the most promising joint venture may go wrong, whether through bad luck, a misconceived premise or disagreement between the parties. This last possibility bears serious consideration as a falling-out between the parties can leave the joint venture company unable to function and, equally, unable to shut down. It will usually be worthwhile setting up a procedure to either wind up the company or oblige one party to sell its shares to the other in the event of any prolonged deadlock, in order to avoid being involved in a frozen company which cannot effectively do anything. On a related note, it is also common to provide that where one party puts itself in breach of the agreement, the other innocent party has the right to buy out the shares of the party in breach at a fair price.
TAX IMPLICATIONS OF OWNERSHIP OF UK RESIDENTIAL PROPERTY The purpose of this note is to consider in general terms how best to structure the ownership of residential property in the United Kingdom as a home or as a second home. It aims to summarise the main advantages and disadvantages of some possible ownership structures, with particular reference to the UK tax implications. Different considerations apply to the structuring of investment in UK property as distinct from property for residential use. The note is mainly aimed at foreigners wishing to acquire property for private use in the United Kingdom.
The precise consequences will vary depending on whether the property may be occupied by individuals who are: Not UK resident or ordinarily resident; UK resident or ordinarily resident but non-domiciled; UK resident, ordinarily resident and domiciled. Occupation of the property may be long-term, short-term or casual and the individuals concerned may be in similar or different circumstances from a UK tax perspective. In a note of this length, it is impossible to do other than summarise the basic tax rules. There are various exceptions or qualifications to these rules, which are not covered here.
Personal Ownership: This is the most straightforward structure. Ownership of residential property in the UK by an individual generally has the following tax consequences: -
The property has a UK situs for inheritance tax (IHT) purposes. Consequently, certain gifts of the property or its transmission on death will give rise to inheritance tax liability regardless of the domicile of the owner. Inheritance tax on death is currently payable at 40% of the value of the taxable estate. The most important exceptions are the nil rate band, which allows each individual an exemption, which is currently Ј231,000 (1999/2000). Property may pass between spouses tax-free if both have the same domicile. If they have different domiciles, then a maximum of Ј55,000 may pass tax-free between them. Transfer of the shares by an executor to beneficiaries under a will or on intestacy will not give rise to stamp duty.
If the owner is not UK resident or ordinarily resident, then the sale of the property would not be subject to capital gains tax (CGT). A UK resident shareholder will be subject to capital gains tax on sale, unless the property qualifies as the individual’s main private residence, in which case the sale is tax-free. Stamp duty is payable on the conveyance or transfer on sale of property. If the value of the consideration is under £60,000, the amount is nil. If the value of the consideration does not exceed £250,000, the rate is 1%. If the value of the consideration does not exceed £500,000, the rate is 2%. If the value of the consideration exceeds £500,000, the rate is 3% (1999/2000).
The IHT risk can be covered by insurance, depending on age and health. On the basis that the property may increase in value and that rates of IHT may change, the position would need to be monitored on a regular basis to ensure that adequate insurance cover was in force. The insurance policy itself would have to be properly structured (probably using a trust) to avoid an additional IHT charge on the proceeds. Principal private residence is considered on a worldwide basis. An election to this effect can be made (within certain time limits) if, as a matter of fact, it is not the only or main residence. On death, UK probate formalities will need to be satisfied in order for title to the property to pass to the intended beneficiary. This is likely to involve some level of extra cost and inconvenience. Sometimes, these formalities can be avoided by holding title in the name of a corporate nominee.
Ownership by a Non-UK Resident Company: Here, the property would be owned by a company, the shares of which would be owned by the individual. Normally, the balance of advantage lies in favour of using a specially formed company, which holds no other assets. If the property is owned by a non-UK incorporated company, then the following will arise: -
If the shares in the offshore company are held on a register outside the UK only or if the shares are bearer shares and are held outside the UK, then in the case of a non-UK domiciled individual owning the shares, no liability to inheritance tax will arise as the asset will not have a UK situs. UK domiciled shareholders will continue to be liable to inheritance tax, because their worldwide estate is taxable.
If the company is not resident in the UK, the sale of the property will not normally be subject to capital gains tax in the hands of the company. However, if the shares in the company are owned by UK residents and the company is a close company, the gain will be attributed to UK resident shareholders unless they are not domiciled. Ownership of a property is normally of an investment nature and therefore a capital gain will arise. Gains on the sale of the shares would be taxable in the hands of a UK resident. In the case of a non-domiciled resident, this would be on the remittance basis. Similarly, ownership of property for residential purposes will not normally give rise to a charge on the sale of the property or the shares under the anti-avoidance provisions of Taxes Act 1988 Section 776, which could result in a tax liability on the sale of the property in the hands of the company or of the shares in the company if the section is applied. Residence of the company is dependent upon where central management and control is exercised.
If the shares are owned by a non-resident and the directors are all non-resident and if the decision making in relation to the company is made by the shareholders or directors, then the company will not be UK resident. This is a matter that will be closely examined by the Inland Revenue. Where the shareholder is a UK resident, and directors are non-resident but act as nominees, there is a strong inference that the company is UK resident. If it is UK resident, the sale of the property will give rise to corporation tax on the gain.
Sale of the shares outside the UK will not normally give rise to stamp duty. Sale of the property will give rise to stamp duty as described above.
Since 1984, the Inland Revenue have taken the view that they may impute an employment benefit on occupiers of the property owned by such companies in certain circumstances. This may happen where living accommodation is provided for a person by reason of employment. Where the Section applies and the cost of the accommodation exceeds Ј75,000, an amount is deemed to be the occupier's income. For the first six years of occupation, the amount is the cost of the property in excess of £75,000 multiplied by a prescribed interest rate. The current rate (since August 1997 ) is 7.25%. After the first period, the amount is calculated by reference to the market value of the property in excess of £75,000. The Inland Revenue apply this provision to an actual employee or officer. They also seek to apply this to a "shadow" director.
A shadow director is any person in accordance with whose directions or instructions the directors of the company are accustomed to act. Thus, where the directors simply take instructions from the occupier, the Inland Revenue will seek to apply these provisions. The charge will also apply to a shadow director where the accommodation is made available to the individual’s "family or household". This means his spouse, children and their spouses, his parents, his servants, dependants and guests. Thus, the charge may be imposed on a shadow director who does not occupy the property if a member of his family such as an adult child living away from the family or household does.
The anti-avoidance provisions of Taxes Act 1988 Section 739 or 740 will be potentially applicable if income arises in the company, for example because it has an interest bearing bank account. Such income will be deemed to be that of the transferor if UK ordinarily resident. This would include a subscriber to shares in the company or the transferor of the property itself to an offshore company. Where Section 739 does not apply and there is income earned by the company in the same way, then the provision of the accommodation will be a benefit to the occupant under Section 740. To the extent that the value of the property is matched by income earned by the company, this will give rise to a UK tax liability. The provisions of Sections 739 and 740 only apply to transferors and beneficiaries respectively who are ordinarily resident in the UK. Ownership through a company may avoid UK probate formalities on death.
Trust ownership of offshore company: Where the shares in the offshore company are owned by an offshore discretionary trust, the following arise:-
The tax consequences will be similar to those in paragraph 2 above. However, ownership of shares by a non-resident will be helpful in indicating that the company itself is non-UK resident. If the trustees are themselves non-UK resident, then the trust will be non-resident. Secondly, if the occupiers are beneficiaries under the trust, then this may be helpful in addressing the application of the deemed employment benefit, because it may be said that occupation is by virtue of being a beneficiary, rather than a deemed director. If the occupant is not a beneficiary, then this inference may not be drawn. Thirdly, if the settlor is not UK domiciled at the time, the shares will be excluded property, even if the settlor subsequently becomes UK domiciled. If the settlor is UK domiciled at the time of transfer, then the transfer itself will be subject to inheritance tax at the lifetime rate of 20%. T
he trustees themselves will become liable to inheritance tax on each tenth anniversary of the trust and on property distributed out of the trust. The rate is currently 6% of the value of the trust property. The comments above relating to Taxes Act 1988 Sections 739 and 740 will apply where there is a trust. It should also be borne in mind that those provisions are applicable in relation to "associated operation" which may result in the income of other entities being relevant to the attribution of income to a UK resident settlor or to beneficiaries occupying the property. There may also be Capital Gains Tax consequences for UK resident and domiciled settlors of the trust on sale of the property and for UK resident and domiciled beneficiaries who occupy the property. Non domiciled individuals will not be subject to CGT in these circumstances.
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