This is a brief guide aimed mainly at overseas businesses wishing to set up in the UK. However much of it is also relevant to someone already in the UK who wishes to start a business.
Overview
The UK is one of the most business friendly countries in the world. A company can be set up quickly and inexpensively, with a minimum of interference from national government bureaucracy. Legitimate businesses will be able to flourish in a country with little corruption, and a legal system that is fair and open.
A business in the UK can be set up as a Sole Tradership, an LLP (Limited Liability Partnership) or a Limited Company. In practice almost all overseas businesses setting up here incorporate as a Limited Company. This is the way that enables the overseas management to best control the UK entity.
Initial Incorporation
You will need to choose a name for your company. Most probably this will be a variation of the existing business name. There are few restrictions as long as the name chosen is not already in use. If you are really concerned, details of the regulations can be found here.
The simplest way to register is to search for “Business Formation Agencies” on the web. There are many of these and unless you have very specific requirements you can register your company for less than £20. The new business will have its Articles of Association phrased in such a way as to allow almost any likely form of trading.
As part of the registration process you will be asked to name at least one director for the company, and the details of who owns the company. There is no absolute requirement for there to be a UK resident director, but it will make many aspects of setting up and running the business easier if at least one director is domiciled here. Ownership can be in any combination of individuals and other legal entities, and located anywhere.
The director(s) are the officials who are legally responsible for the conduct of the company.
You will also need to specify the Registered Office address. This is not necessarily the trading address, but an address to which any official notification can be sent and assumed to have been received by the directors. The company formation agent may well offer (for a fee) to let you use an address of theirs. I would always recommend using your accountant’s office as the Registered Office. Almost all accountants offer this for a relatively small fee.
Accountancy practice
One of your earliest actions should be to appoint an accountancy practice. If you are large enough in your home territory your current accountants may already have an office in the UK or a reciprocal arrangement with a UK practice. Your accountants will be able to give you advice on many aspects of running your business here, including, but not limited to, taxation. It is important that you select a firm with which you feel confident and comfortable.
Banking
Your company will need a UK bank account before it can trade. UK anti-money-laundering regulations are stringent, and you will need to satisfy any bank on this before they will open an account for the company. Again you may prefer to use the UK subsidiary of your existing bank.
Conclusion
I have only attempted to address the mechanical necessities of setting up in the UK. Clearly the most important considerations before deciding to set up here are the viability of the business you are considering, and the funds you will need to set up and run the business until it is cash generating. I would be happy to discuss these in detail should you wish.
For a no-obligation discussion on any aspect of setting up or running a business in the UK, please contact richard.wickes@lgbusinessadvisors.co.uk or on +44 (0)20 7731 0853.