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Register company in UK
REASON TO REGISTER COMPANY IN UK
Registering company in UK has several advantages:
- Increased trust: Britain has a recognized reputation in the field of business and finance, which contributes to increased trust among customers, partners and investors after registering a company in the country.
- Global presence: UK is an international business center with a large number of international companies. Company registration allows you to gain access to various business opportunities and develop global connections.
- Tax benefits: UK tax system can be attractive to businesses, particularly with low corporate tax rates.
- Flexibility and protection of rights: Companies incorporated in the UK have flexible arrangements for organizing and managing their business. The British legal framework also provides a high level of protection for the rights of company owners.
- Funding opportunities: UK has a developed funding system, including banks, investment funds and the securities market. This creates opportunities to raise capital to grow your company.
It is worth remembering that the specific advantages of registering a company in Great Britain may depend on the specifics and type of activity of the company.
THE MAIN ORGANIZATIONAL AND LEGAL FORMS OF DOING BUSINESS IN GREAT BRITAIN:
The most common forms of doing business in Great Britain are:
1. Sole trader
- The Sole trader form of business is suitable for you if you work for yourself and want to have a formal business. You will be able to access your business profits after tax.
- You are personally liable with all your property for debts from business activities. You must also comply with certain rules regarding the naming of this form of activity.
- You need to register as a Sole trader if your self-employed income exceeded £1,000 between 06 April 2022 and 05 April 2023.
Obligations that will arise after registration as a Sole trader
- financial reporting and expense reporting
- submitting an annual tax return every year
- pay income tax (Income tax) on your income, as well as a contribution from the national insurance of self-employed persons
You can voluntarily register as a VAT payer (if it suits your business) or:
- your total VAT chargeable income exceeded £85,000 in the last 12 months
- you expect your income to exceed £85,000 in the next 30 days
You also obligate to register as a VAT payer, if all three of the following conditions are true:
- you are outside the UK
- your business is outside the UK
- you supply any goods or services to the UK (or expect to within the next 30 days)
Choosing a name
- You cannot include the following phrases in your business name: limited, Ltd, limited liability partnership, LLP, public limited company or plc.
- In addition, you cannot include words that may be offensive in the name.
2. Limited companies
In the light of modern de-offshore trends and the fight against aggressive tax planning, new tools for optimizing the tax burden are gaining more and more popularity, one of which is the English limited liability company (LTD). This form of ownership is an analogue of a private joint-stock company, has proven itself well in the international arena and provides its owner with all the advantages of doing business in Great Britain.
The English company LTD is the optimal solution for entrepreneurs who value reputation and status in combination with low cost and ease of company maintenance. English LTDs open accounts in European banks without problems, are widely used to optimize business structures, indispensable for working with countries where strict anti-offshore legislation has been introduced.
Advantages that provides by Limited company
- Quick and easy registration
- Low cost of registration / purchase and annual substance
- Director may be non-resident
- Ability to obtain VAT and EORI numbers
- Ability to obtain tax residence certificate (for LTD companies where the director is a UK citizen)
- Ability to take advantage of a large number of double tax agreements with other countries, allowing UK companies to avoid paying corporation tax on dividends, interest and royalties abroad
- Ability to open an account in most banks
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- Automatic assignment of the TRN tax number (Tax Reference Number) upon company registration
Partnerships are a form of business in the UK where two or more individuals or legal entities form a joint commercial entity. The main features of the partnership are the following:
- Ownership structure: In partnerships, each partner has an equal share in the ownership, management and profits of the company. Distribution of profits and losses usually occurs in accordance with the agreements set forth in the partnership agreement.
- Limited liability: In most types of partnerships, such as Limited Partnership, there is an opportunity to limit the personal liability of the partners for the obligations of the company. However, in some cases, for example in a General Partnership, the partners have unlimited personal liability for the company's obligations.
- Flexibility and joint management: Partnership allows partners to jointly manage the business, make decisions and set company policies. Each partner has the right to participate in the conduct of affairs, to contribute and influence the development of the business.
- Tax advantages: One of the advantages of a partnership is its tax treatment. In partnerships, profits and losses will go to the partners, who include them on their personal tax returns. This can be advantageous from a tax point of view, as the avoidance of double taxation can be achieved at the level of personal taxes of the partners.
GENERAL REQUIREMENTS FOR BUSINESS IN GREAT BRITAIN
You may have different responsibilities depending on the form of business you choose to do in the UK
Be sure to check if you need one:
- License (for example for distribution of music, food sales, etc.)
Certain rules govern your business when you:
- Sell goods online
- Buy goods outside UK or distribute goods outside UK
In addition, you may have some responsibilities depending on where you work (from home or rent an office elsewhere).
If you rent or buy property in the UK, you may have to pay different rates of tax.
A small business can apply a discount on the tax rate, and in some cases not pay at all.
Requirements for authorized capital
In the UK, the share capital requirements depend on the type of company you plan to set up. The main types of companies in Great Britain are Limited Liability Company and Public Limited Company. Therefore, the share capital requirements will be different for these two types of companies.
1. Limited Liability Company:
- Authorized capital for limited liability companies is set at £1.
- However, it is important to note that most limited companies have a significantly higher share capital, which reflects the true financial strength and intentions of the company.
2. Public Limited Company:
- Public Limited Company have higher requirements for authorized capital compared to limited liability companies.
- Currently, the minimum share capital for public limited companies is £50,000.
TAXATION IN UK
The taxation system in Great Britain based on direct taxation, where residents and non-residents pay taxes according to established rules and rates. There are several main types of taxes in the country:
- Income Tax: This is income taxation, which depends on the income level of a person. Tax rates are progressive and vary depending on income.
- Corporation Tax: This tax is paid by businesses on their profits. The tax rate also depends on the company's profit level.
- Value Added Tax - VAT: This is taxation of consumer goods and services. The UK has different VAT rates for different goods and services.
Among these examples are other taxes, such as excise taxes and property taxes.