Every company in the UK must, by law, be set up with the correct legal structure in place. There are a variety of legal structures available and which set up you choose will depend on the particular needs of your business.
At Paul Beare Ltd we are experienced in advising clients on the correct structure. The three entities below are among the most typical for companies involving an overseas parent company and associated shareholders.
Subsidiary Limited Company
- A Limited Company is governed under UK law – and carries the same status as a subsidiary. You will need to decide on your company name; there are some rules around what it can and can’t be. You need to have at least one director – we recommend two in certain situations. You also need a shareholder. It is common for there to be multiple shareholders. There is no maximum number of shareholders.
- A Subsidiary Limited Company involves an overseas subsidiary setup in the UK is a UK limited company whose shares are wholly owned by the overseas parent company. The UK subsidiary is a separate legal entity, governed under UK law. The UK subsidiary is separate from its parent company owner.
- A Branch arrangement means the company is not a separate legal entity, but is governed by the law and regulations of where the parent company is located. The branch is registered at Companies House as an overseas entity.
Once we have worked out what structure works best, we are then able to take things forward by getting the necessary paperwork, systems and processes in place to ensure you are compliant with UK law. In no particular order, this may include:
- Set up the entity
- Register the entity at Companies House: Registration fees will apply but they are small nominal amounts. Once registered you then become part of the UK business ecosystem.
- Register with HMRC, Corporation Tax and VAT if required: The Revenue will need to be made aware of your existence from the moment you begin trading. To understand whether you need to register for VAT, this guide should help.
- Engage legal and accounting advice: Getting a good accountant in place – and legal advice if necessary – can save a lot of heartache and stress further down the line.
- Take out correct insurance.
Another option is a partnership company setup.
This is explained in further detail here.