English LTD. Company Formation

Establishing a UK Limited Company
A UK Limited Company means limited personal liability for the founders. The purpose of the company must be decided upon before entering into the set-up phase. Several formalities and procedures must be completed. In the following you can read more about some of the options you have and services you receive when setting up a UK Ltd.

We Will Take Care of all Communication with Companies House
Since 1844 England has had a special authority for registration of Ltd. companies. This authority is called Companies House and records more than 300.000 companies annually. Companies House is run by a board and an additional ”Steering Board”, both consisting of 7 people from both the private and the public sector.

If you wish to set up a Ltd. company, we will take care of all communication with Companies House. We also complete your Annual Return report, ensuring that all formalities are observed.

Documents Concerning the Setup of a Ltd. Company
Registration of the company is done through a registered agent who is a UK resident. This agent is usually a lawyer or a certified auditor, and he is responsible for handling all official documents in regards to stamps, delivery to correct address, time-limits, approvals by appropriate authorities etc.  

The Agent will Handle the Following Documents:
- Certificate of Incorporation
- Memorandum of Association
- Share Certificate
- Articles of Incorporation
- Tax forms CT41G and CT600

More About UK Limited Companies

Private Limited Company - LTD.
A British privately owned limited liability company is often referred to simply as a ‘Limited’ company. This is because the abbreviation for this type of company is ‘Ltd.’, which must be indicated after the company name. A limited company means ‘a company with limited liability’. Be careful not to confuse Limited companies with PLC companies. PLC is short for Public Limited Company, and the minimum capital of such companies is 50,000 £. A Limited company can be turned into a PLC, if for example the company is listed on the stock exchange. Ltd. companies are subject to the British Companies Act of 1985, which has often stood the test.

The European Union
In recent years, the EU has changed its trading limits and today constitutes a common market with free trade between the countries. This means that as a company owner, you can choose to use the company structure that best fits your needs.

We have chosen a company solution in the United Kingdom, since such a solution gives access to the EU and because the United Kingdom has a liberal approach to ownership and management structure. Besides, there is the opportunity to cooperate with offshore companies – read more about this under IBC – offshore companies.
Another factor is that in the United Kingdom the legislation is based on Anglo-Saxon law, also referred to as Common Law. The principles of common law are based on the common practices and customs of the country, and therefore the laws cannot be changed with retrospective effect, like they can in Denmark.
Limited companies can be used for business purposes within trading, leasing, IT, marketing etc.
UK Limited Companies
A UK Limited company is divided up into equal parts called shares. Each share has a nominal value of for example 1 £. When the share is sold to the shareholder, the shareholder invests means into the company corresponding to the nominal value. These means may be money or other assets. A Limited company can be called a Limited company when only two shares have been sold. Therefore, the setting up of a UK Limited company is not very cost-intensive. The shareholders are not necessarily empowered to sign for the firm – this is usually done by the Board of Directors. Often small, newly established companies have only one director.

Since the United Kingdom is extremely liberal with regard to ownership, a UK limited company may be owned by an offshore company or by a Trust Fund. This is one of the reasons that we prefer the United Kingdom as the entry country into the EU. As far as the management of companies is concerned, the United Kingdom has stricter rules than for example Denmark. The director is responsible for all the activities of the company. Therefore, being a director of a Limited company implies great responsibility.

Companies House
Since 1844, England has had a special authority for the registration of companies with limited liability. This authority is called the Companies House and handles the incorporation of more than 300,000 new companies per year. The Companies House is governed by a board consisting of seven persons (two men and five women). Claire Clancy is the Chief Executive Officer and is in charge of the day-to-day management of the agency.

Who Can Set up a UK Limited Company?
The formation of a Limited company corresponds to the founding of a Danish ApS company. The establisher of an ApS will naturally have considered the purpose for establishing the company – and this also applies to a Limited company.
Danish nationals may use a UK Limited company for trading activities inside the EU. Often, the UK company is used for importing goods into the EU and from there distribute the goods to other EU counties. Thereby part of the revenue is generated in the United Kingdom and hence subject to lower taxation.
UK Limited companies may also be used in connection with various consultancy jobs throughout the EU, where the UK Limited company pays the salary. For a Danish national this means that he or she will not be subject to paying social security contributions (Danish arbejdsmarkedsbidrag 8 %). Also, persons with extensive business travelling activity are entitled to tax allowance according to Danish rules.

Use a UK Limited Company for Consultancy Work
A new trend that seems to be picking up in Europe is that employees are no longer employed as permanent staff, but instead function as subcontractors. This gives the employee larger scope for managing his or her own time, the opportunity to work for who they want as well as the chance to earn more money.
The employer has the advantage that the employee is not a financial burden on the company in periods of declining orders; the employer does not have to withhold Danish A-tax and is not obliged to pay holiday disbursement or sickness benefits.
‘A ticking bomb under the welfare system’, some would claim, but the fact is that many people would rather pay a bit more private insurance against having more scope to choose where and when they spend their free time.

Tasks for a Limited company
A Limited company can undertake a number of tasks. The most common are ownership tasks such as for example subsidiaries.

Below is a list of tasks a Limited company may undertake:

- Holding company for a subsidiary
- Leasing company for operating companies
- Property company
- Import company with distribution to the EU
- Consultancy company
- Advertising agency
- Telemarketing company
- Temping agency
- Software development company
- Event company
- Course activities
- Management activities
- Leasing company of equipment
- Extension of concept stores

The list is long. It is beyond the scope of this website to examine each task in detail – here we discuss the general tasks for which a Limited company can typically be used.

Leasing Company Operated by a UK Limited Company
A UK Limited Company is an extremely useful structure for the leasing of equipment, tools, machines, software, hardware etc. through an operating company. Such a company may for example be a floor cleaning business. In such a structure the UK Limited company would be the owner of the cleaning machines and other equipment, and lease it to the Danish operating company.
The cost-effectiveness of the above solution for Danish operating companies can be illustrated by some simple calculations. Since, with certain limitations, the owner can determine the leasing price, the profits of the Danish operating company can be minimised.

Property Company
A Limited Company is a very useful company structure for a property company, and such a company is entitled to own Danish property. For example, the Limited company may be a joint owner of a Danish I/S, together with a private individual. The construction enables the private individual to protect his or her assets from outside creditors, since the individual partners of an I/S company cannot be sued by creditors to the I/S. However, this requires that the I/S contract has been drawn up correctly.

Course Activity
The product turnover of a business involved in course activity is usually made up of teaching hours and some teaching materials. This kind of business is suitable for a Limited company structure and the gain from using the Limited company structure will be substantial. Again, this is due to the tax bill.

What Does the Client Pay for?
As a client who establishes a Limited company you will naturally want to know what you are paying for. Below you will find a description of the individual services that we deliver in connection with the incorporation and operation of a Limited company.

Documents required in connection with the incorporation of a UK Limited Company
The incorporation of a Limited company takes place via a registered agent with permanent residence in the United Kingdom. Usually the agent is a lawyer or an accountant. The agent ensures that all documentation is handled and correctly signed, sealed and delivered. The agent also handles documents that must be validated before a notary public.

The Agent Arranges the Following Documents:
- Certificate of Incorporation
- Memorandum of Association
- Share Certificate
- Articles of Incorporation
- CT41G
- CT600

Registered Address
A company obviously needs a registered address. Most often this address will be delivered by the registered agent. The address is required in order to allow the Limited company to enter into contracts, etc. Mail delivered to the address will be filed together with the company’s other documents.
Company Secretary / Secretarial Service
This person is registered as the official company secretary and is authorised to sign on behalf of the company, BUT ONLY JOINTLY WITH THE DIRECTOR. Often joint signatures are required for a company to enter into contracts, open accounts etc. In the United Kingdom it is a statutory requirement to have an official company secretary. GVC offers to deliver the secretary if the company does not have one. Such a delivered secretary is called a Nominee Secretary.

Company Director also called a Nominal Director, Pro forma Director or Nominee Director
The company director, or directors, constitute the management or the board of the company and is also referred to as the Board of Directors. The members of the management are responsible for the operation of the company. In the UK it is a government requirement that these persons are registered by name, address, birthday and nationality. It is not a requirement that the directors are residents of the UK.

According to UK legislation the directors hold a large degree of responsibility. The legislation places more responsibility with the management than with the owners. The director(s) are directly responsible for the company accounts and any reporting to the authorities. A special assessment and investigation of a director’s background is undertaken in connection with the opening of bank accounts for the company. This takes place as a consequence of the special Money Laundry Act, which the UK introduced some years ago to fight the laundering of money.

In case a client does not want to be registered by name in connection with the company, a Nominal director is appointed. A nominal director is also referred to as a Managing Director or a CEO - Chief Executive Officer.

Usually it is not an option to obtain assistance from the Nominal Director. However, at Certus we offer you in connection with this service 10 hours of work per year. Such assistance may include the drawing up of contracts, scheduling of client meetings or perhaps circulation of letters, etc.

Virtual Office / Office service
A Virtual Office, as the name implies, is an office that is virtual. A Virtual Office is an office service through which you as a client can receive mail and forward mail to any address globally. In addition, your company is provided with a direct telephone line, and calls are answered in the company name. Calls are answered daily between 09.00 and 17.00 GMT. The company is also provided with a fax number from where all fax messages are forwarded to an e-mail address according to the client’s instructions. All messages delivered by telephone are forwarded via e-mail according to the client’s instructions.

Business Package
A Business Package includes a business card, stationary and stamp. This is an easy way for a client to obtain a professional profile in relation to customers and suppliers.

Stamp
Stamp with company logo, name and address.

Nominee Shareholder
A Nominee Shareholder is a named shareholder who does not have any actual ownership of the company and has no voting right. He or she lends his/her name to the company. A Nominee Shareholder is used if the owner of the company does not want to register his/her name in connection with the company. Another alternative is to set up a trust fund as the owner of the shares. Such a fund should be an offshore fund, which is a non-taxpayer.

Accounting Service
Accounting service is a requirement if the customer uses the Nominee Director Service, since the Nominee Director is largely responsible for preparing the company accounts.

Company Bank Account for the Limited Company
A company must set up a bank account in order to be able to invoice its customers for services or products. In connection with the opening of a bank account the bank requires the following information about the directors of the company:

- Bank statements for the last three months from the director’s local bank account
- Copy of drivers’ license or pass port

If the Director Resides in the UK, the Latest Annual Settlement
Please allow for a three-week delivery time for the opening of a bank account.
When the company uses a Nominal Director the time of opening up a bank account is shorter, since the customer him/herself does not need to be registered for the account, but only has the power to sign for the company’s account.

Taxation on Profit of a UK Limited Company
Like in all countries in the EU, the profit of a company is subject to tax. In the UK the company tax rate is 30 %. However there are different tax brackets.

- A company with profits of £10,000-30,000 pays 0 % tax on the first £10,000 and 19 % tax on the rest.
- If the profits exceed £50,000 a special calculation for marginal income tax is used. The below table can be used as a basis for the calculation of the company’s income tax:
- 0 - 10.000£ = 0% taxation
- 10.000 - 300.000£ = 19% taxation
- More than 300.000£ = 30% taxation

The exact percentage for the individual intervals can be obtained from GVC or with Inland Revenue.

Employment with a UK Company
When employed by a UK company and receiving a salary from the company, while residing elsewhere in Europe, you are not subject to paying labour market contribution in your home country. Further, UK companies are not required to withhold income tax and therefore pay out the full salary to its employees. It is therefore important that employees remember to set money aside for the tax bill at the end of the financial year. If the customer for example lives in Denmark, and the work is carried out in e.g. Norway, the local tax authorities should be consulted for further information with regards to taxation. It is likely that this will imply an extra allowance and a lower tax rate on the personal income.

Complete UK LTD. Standard Package Includes:

- Name check
- Founding of company
- Registration with appropriate authorities
- Certificate of Incorporation
- Memorandum of association
- Share Certificate
- Registered address
- Company-kit
- Yearly company fees for the first 12 months
- Bank account in England - London
- Virtual Office mini (mail forwarding with “same day access”):

Package Cost: 1,540€

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Complete UK LTD. Gold Package Includes:

- Name check
- Founding of company
- Registration with appropriate authorities
- Certificate of Incorporation
- Memorandum of association
- Share Certificate
- Registered address
- Nominee Director
- Power of Attorney
- Company-kit
- Yearly company fees for the first 12 months
- Minutes of the Board of Directors
- Board resolution authorising the opening of bank account
- Register of directors
- Register of shareholders
- Bank account in England - London
- Virtual Office Gold (Telephone, fax, e-mail, forwarding of mail and professional handling of calls)

NB: This solution can also provide you with standard contracts such as agency agreement, employment contract, Nominee Company agreements etc.

Package Cost: 2,215€:

To order the UK LTD Standard or Gold Company Formation package please contact us or use our on-line order form. You can also contact us if you have more questions regarding an UK Limited Offshore Company.