FORMING A COMPANY
This information sheet summarises the key issues when forming a company in
the UK.
The factors covered are:
1. Overview
2. Definition of a UK registered company
3. Setting up a UK registered company
4. Alternative business structures for foreign investors
5. Choosing a company name
6. Further information
1. OVERVIEW
The UK has an open, transparent and business-friendly system to encourage
the formation of new businesses. There are more than 2.5 million registered
companies in the UK, with over 330,000 new registrations each year. No
permission is required to establish a business presence in the UK, although
there are regulations on the use of business names and certain business
sectors which may require licences or authorisation (such as finance, defence
and oil exploration).
Companies House is the key government organisation that co-ordinates the
administration of businesses in the UK. Detailed guidance on the requirements
for forming a company in the UK is available at: www.companieshouse.gov.uk
Independent professional advice on forming a company in the UK can also be
obtained from accountants, solicitors and company formation agents (see
Appendix A for further information).
2. DEFINITION OF A UK REGISTERED COMPANY
The majority of foreign investors will establish a “Registered Company” when
setting up in the UK. There are four different types of UK registered company:
– Private company limited by shares (“Ltd”) – the members’ liability is
limited to the amount unpaid on shares they hold.
– Private company limited by guarantee – the members’ liability is limited
to the amount they have agreed to contribute to the company’s assets
if it is wound up.
– Private unlimited company – there is no limit to the members’ liability.
– Public company limited by shares (“plc”) – the company’s shares are
offered for sale to the general public through a stock exchange and the
members’ liability is limited to the amount unpaid on shares