United Kingdom Limited Company
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Asset protection
Anonymous banking
Cyprus

Introduction

The U.K. limited company hardly needs any introduction. The U.K. Limited is used worldwide because of the fast and reliable incorporation and the low fees.
Within Europe the U.K. limited has become very popular to avoid the local company requirements in countries with a outdated or complicated company law.
For example, in The Netherlands the U.K. Limited is widely used for local business, to avoid the capital requirements and the high notary costs, which are involved when a Dutch B.V. is incorporated.

Regulation

U.K. Companies are regulated by the Registrar of Companies regarding Company law matters.
The incorporation documents need to be filed by a registered agent after which the Registrar of Companies will perform the incorporation.
The registration of the company is only possible in English. However, documents relating to Welsh companies may be drawn up and delivered in Welsh.

Incorporation of the U.K. limited company

Choosing a name

Private companies limited by shares are required to have the suffix “Limited” (often written “Ltd” or “Ltd.”) or “Incorporated” (“Inc.”) as part of their name, though the latter cannot be used in the UK or the Republic of Ireland.
The company name must be officially approved by the Registrar of Companies. On applying to the Registrar for the approval of a name, it is recommended that two or three possible names ending with the word “limited” be submitted as this may avoid unnecessary delays. Applicants should however, bear in mind that a name is not likely to be approved if:

• it is similar to the name of an existing company
• it is considered misleading or confusing
• The Company name can be rejected in case the name:
• is ‘the same as’ a name already on the index;
• includes the words ‘limited’, ‘unlimited’, ‘public limited company’ or ‘community interest company’ anywhere except at the end of the name. This applies equally to abbreviations or the Welsh equivalent of the words;
• ends with ‘commonhold association limited’ or the Welsh equivalent (unless the company is a commonhold association);
• ends with ‘community interest company’, ‘community interest public limited company’ (or abbreviations or Welsh equivalents) unless the company is a community interest company;
• ends with Right to Manage or RTM company limited or the welsh equivalent unless the company is an RTM company;
• ends with LLP (unless it is an LLP) ;
• is offensive;
• is one the use of which would be a criminal offence; or
• includes any of the following (unless it is one of these company types), anywhere, in the company name;

- ‘investment company with variable capital’ (or its Welsh equivalent);
- ‘open-ended investment company’ (or its Welsh equivalent);
- ‘limited liability partnership’ (or its Welsh equivalent);
- the abbreviation ‘SE’ (or

You will need the approval of the Secretary of State for Business, Enterprise & Regulatory Reform before you use any of the following words or expressions (or their plural or possessive forms) in your chosen company name.

(a) Words which imply national or international pre-eminence:
British, England, English, European, Great Britain, International, Ireland, Irish, National, Scotland, Scottish, United Kingdom, Wales, Welsh

(b) Words which imply business pre-eminence or representative or authoritative status:
Association, Authority, Board, Council, Federation, Institution, Institute, Government, HSC, HPSS, Society

(c) Words which imply specific objects or functions:
Assurance, Assurer, Benevolent, Charter, Charered, Chemist, Chemistry, Co/operative, Foundation, Friendly Society, Fund, Group, Holding, Industrial _ provident society, Insurance, Insurer, Patent, Post office, Register, Trust, etc.
Furthermore there are restrictions on names like University, Chamber of Commerce, Police, Institute, etc.

Required documents

For a company to be registered, the following documents and information must be filed with the Registrar of Companies:
(a) The Memorandum and Articles of Association. The Memorandum must state, among other things, the following:

• The name of the company with “Limited” as the last word;
• The situation of the registered office;
• The objects of the company, which it is advisable that they should be as wide as possible so as to enable the company to engage in any kind of business or activity, without this being “ultra vires” (beyond the powers of) the company and, therefore voided;
• A statement that the liability of the members is limited by shares or by guarantee, when applicable;
• The amount of the share capital and details of the shares authorized to be issued, and
The subscribers to the memorandum together with the number of shares for which they have subscribed.

(b) The Articles of Association which generally govern the company’s internal procedures and functions. The articles contain rules governing the internal management of the company and regulating the rights of its members among themselves.
The articles may be altered or added to by means of a special resolution, which requires a majority vote of over 75 per cent of the members. The articles deal with matters such as:

• General meetings of the company;
• Voting rights of members;
• Transfer of shares;
• Appointment and powers of directors;
• Dividends;
• Accounts & Audit;
• Specimen memorandum and articles of association, which have been prepared after careful study by lawyers and Focus Business Services, can be made available, but care should be taken that the first few main objects’ clauses are tailored to the specific circumstances and the main business objects of the company.

(c) Form 10 which states the first directors, the first secretary and the address of the registered office. Each director must give his or her name, address, date of birth, occupation and details of other directorships held within the last five years. Each officer appointed and each subscriber (or their agent) must sign and date the form.

(d)Form 12 is a statutory declaration of compliance with all the legal requirements relating to the incorporation of a company. It must be signed by a solicitor who is forming the company, or by one of the people named as a director or company secretary on Form 10. It must be signed in the presence of a commissioner for oaths, a notary public, a justice of the peace or a solicitor.

Incorporation time and procedure

To incorporate a company in the UK (other than Northern Ireland) the following documents, together with the registration fee, must be sent to the Registrar of Companies:
Form 10
Form 12
The articles of association
The memorandum of association
The incorporation time of a U.K. Private Limited Company is approximately 24 hours.

Compliance

General

Any company qualifies for the incorporation of a U.K. company.
If it concerns a foreign company, it´s necessary to use a registered office in the United Kingdom, which can be provided by the registered agent.
The registered office is used for communications with the local government. All government related mail, will be send to the registered office in the United Kingdom.
It is advised to appoint a secretary who is present at the registered office, so all requirements and responsibilities can be easily fulfilled.

Board members

The shareholders of the U.K. company need to appoint at least one director at the time of incorporation.
Every company must have formally appointed company officers at all times. By statute, a private company must have at least one Director and until April 2008 also had to have a Secretary (see Companies Act 2006). The company’s articles of association may require more than one director in any case, and frequently do. At least one director must be an individual, not another company.
Anybody can be a director, subject to certain exceptions. A person who has previously been declared bankrupt or who has been banned from being a company director by the court will also be restricted. Nor can a person be a director of a limited company if he or she is unable to consent to their appointment. From October 2008, all directors must be at least 16 years old. This change will be applied retrospectively, with any directors under the age of 16 being removed from the register (Companies Act 2006).

No formal qualifications are required to be a company secretary.
In Scotland the Registrar will not register the appointment of a director under the age of 16 years for any company, as such a child does not have the legal capacity to accept a directorship, under the Age of Legal Capacity (Scotland) Act 1991.

Certain non-British nationals are restricted as to what work they may carry out in the UK.
As of October 2008 (Companies Act 2006), it is no longer necessary to obtain a court order to withhold a director’s address, as a Service Address can be supplied as well with the residential address being held as protected information at Companies House.

Share Capital

Only £1 share capital is needed to start up a private limited company. Limited Companies are formed with both an authorised share capital and an issued share capital. The authorised share capital is the total number of shares existing in the company multiplied by the nominal value of each share. Not all such shares may have been issued. The issued share capital is the same calculation in respect of all the issued shares.

A company incorporated in England and Wales can be created with any number of shares of any value, in any currency. For example, there may be 10,000 shares with a nominal value of 1p, or 100 shares each of £1. In each case the share capital would be £100.
Unissued shares can be issued at any time by the directors using a Form 88(2), subject to prior authorisation by the shareholders.

Shares in a private company are usually transferred by private agreement between the seller and the buyer, as shares in a private company may not by law be offered to the general public. A stock transfer form is required to register the transfer with the company. The articles of association of private companies often place restrictions on the transfer of shares.

Company accounts

A company’s first accounts must start on the day of incorporation. The first financial year must end on the accounting reference date, or a date up to seven days either side of this date. Subsequent accounts start on the day following the year-end date of the previous accounts. They end on the next accounting reference date or a date up to seven days either side.
To help companies meet this filing requirement, Companies House send a pre-printed “shuttle” form to its registered office several weeks before the anniversary of incorporation. This will show the information that has already given to Companies House. If a company’s accounts are delivered late there is an automatic penalty. This is between £100 and £1,000 for a private company.
The first accounts of a private company must be delivered:

• within 10 months of the end of the accounting reference period until April 2008, when it will reduce to 9 months; or
• if the accounting reference period is more than 12 months, within 22 months of the date of incorporation, or three months from the end of the accounting reference period, whichever is longer.

A company may change its accounting reference date by sending Form 225 to the Registrar.

Registered office

Every company must have a registered office, which does not need to be its usual business address. It is sometimes the company’s lawyers or accountants, for example. All official letters and documentation from the government departments (including Inland Revenue and Companies House) will be sent to this address, and it must be shown on all official company documentation. The registered office can be anywhere in England and Wales (or Scotland if the company is registered there). If a company changes its registered office address after incorporation, the new address must be notified to Companies House on Form 287.

Administration

All companies, trading or non trading, must keep accounting records. There are three variations on filing accounts and these impact on the amount of information available in a credit report.
If they are eligible and wish to, medium-sized, small and dormant companies may prepare and file ‘abbreviated accounts. Exemptions are not available to public companies, banking, insurance or shipping companies and any of their subsidiaries regardless of size.
Private Limited companies must file accounts within twenty-two months of incorporation.
Public Limited companies must file accounts within nineteen months of incorporation.

Small Company Filing Requirements

Small companies must deliver the following filings to Companies House:

• Abbreviated balance sheet and notes
• Special auditor’s report (if required)
• Small companies are not required to file profit and loss, employees and turnover

A small sized company is one that meets at least two of the following three criteria.

For financial years starting before 6 April 2008:

• Annual turnover must not be more £5.6 million
• The balance sheet total must not exceed £2.8 million
• The average number of employees must not be more than 50

For financial years starting on or after 6 April 2008:

• Annual turnover must not be more £6.5 million
• The balance sheet total must not exceed £3.26 million
• The average number of employees must not be more than 50

Medium Company Filing Requirements

Medium companies must deliver the following filings to Companies House:

• Full balance sheet
• Abbreviated profit and loss account (no turnover disclosed)
• Special auditors’ report
• Directors’ report
• Notes to the Accounts
• Medium companies are not required to file turnover

A medium sized company is one that meets at least two of the following three criteria.
For financial years starting before 6 April 2008:

• Annual turnover must not be more £22.8 million or less
• The balance sheet total must not exceed £11.4 million
• The average number of employees must not be more than 250

For financial years starting on or after 6 April 2008:

• Annual turnover must not be more £25.9 million
• The balance sheet total must not exceed £12.9 million
• The average number of employees must not be more than 250

Full Company Filing Requirements

A full filing company must deliver the following filings to Companies House:

• A profit and loss account
• A balance sheet signed by a director
• An auditors report signed by an auditor
• A directors’ report signed by a director or the secretary of the company
• Notes to the Accounts
• And, if appropriate, group accounts

Dormant or Non Trading Company Filing Requirements

A non-trading company must deliver Dormant Accounts annually.
Dormant accounts include very little information except for assets and shares held.
A dormant company will not be assigned a credit score or limit due to the lack of financial data. See Dormant Companies for more information.

Newly Incorporated Company Filing Requirements

New Private Limited companies must file accounts within 10 months of the year end
New Public Limited companies must file accounts within 7 months of the year end
Where no accounts have been filed at Companies House it is not possible to assign a credit score or limit due to the lack of financial data.

Taxation

General

A U.K. limited company is only taxable in the U.K if its resident in the U.K.
If you don’t want to claim residency but simply use the corporate form(for any reason), it’s very easy to inform the authorities of foreign residency after which the company can be used without tax liability.

Residence of the company

A company is UK tax resident if it is incorporated in the UK or, if not incorporated in the UK, if
its place of central management and control is in the UK. In practice, this often means
determining whether the directors exercise central management and control and, if so, where
they exercise that control. Where a company would be resident in the UK because its
management and control is in the UK but also would be resident under another country’s tax
law because the company is incorporated there, its residence status may be resolved by an
applicable tax treaty (if any) between the two countries. In determining residence, HMRC
considers whether the directors exercise central management and control and, if so, where such central management and control is actually exercised

Taxable Income(rates)

The taxable income under the income tax law is calculated based on the accounting profits as defined by the International Financial Reporting Standards (with some adjustments)
Only the central government levies corporate income tax. The highest rate of company tax is
28%, and companies with taxable profits of GBP 1.5 million or above pay this rate.
There is no tax on corporate capital, and no excess profits or alternative minimum tax.

Privacy

Only the Memorandum and Articles of Association are required for public records and the registration of Registers of Directors, Members, and Mortgages and Charges are optional.
The Registrar of Companies holds details of directors, secretary, registered mortgages and charges and Memorandum and Articles of Association, which are available for public inspection. The only information not available to the public are the details of non-resident beneficiaries who are not registered shareholders.

As a member of the European Union, and a Double Treaty partner of many countries, The United Kingdom has agreed to exchange information if necessary.

Summary main characteristics of the U.K. Limited

Factor
Description
Income and business tax in the U.K.
None
Conduct business internationally
Yes, non residents company taxfree
Conduct business within Cyprus
Yes, 10% taxes
Official language / language of documents
Greek
Minimum paid-up capital
1000
Optimum amount of authorized capital
No limitation
Government license fee
CYP 100
Bearer shares
Allowed
Minimum number of directors
One
Minimum number of Members (shareholders)
One
Non-resident directors
Allowed
Corporate directors
Allowed
Registered Agent and Address in Cyprus
Required
Register of Directors
To be kept by the Registered Agent, and filed at registrar
Register of Members
To be kept by the Registered Agent
Register of Members filed for public record
No
Disclosure of beneficial owners to Registrar
Yes
Disclosure of beneficial owners to Registered Agent
Yes (confidential due diligence)
Holding of Annual General Meeting
Required
Convention of Meetings of Directors / Members
In Cyprus
Corporate Minutes and Resolutions
To be kept by the Registered Agent
Corporate Seal
Required
Keeping of accounts
Not required
Auditing of accounts
Required
Filing of accounts
Required
Access to double-tax avoidance treaties
Available
Subject to currency controls / restrictions
No
Redomicile a foreign company into Seychelles
Yes
Redomicile a Cyprus company abroad
Yes
Net time to incorporate
1-2 business days
Ready-made (shelf) companies
Available