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Company formation England
A Limited Company in the United Kingdom is registered according to the laws of the Limited Companies Act of 2006 which supersedes other company acts in the UK. A Limited Company is a business structure where members or shareholders have their liability limited to the contributions which they have made or invested in the company. Forming a Limited company has many advantages for owners and is easy to incorporate.
Key advantages of UK limited include:
It’s quick and easy to get started
It’s now very easy to start a limited company and it can all be done online. Long gone are the days of waiting weeks for Companies House to process the paperwork: now you can start a limited company in just a few hours. What’s more, the cost of incorporating is an allowable expense against corporation tax.
The company has a separate legal identity
A limited company has its own legal identity. So third parties contract with the ‘company’ and not the individual directors and shareholders. This means companies survive the death of the owners and it’s possible for the directors and shareholders involved with the company to change over time.
The owners’ liability is limited
The shareholders of a company have a limited or capped liability for the debts of the business. The extent of their liability is the amount paid for their shares plus, if they have any, the unpaid amount on any nil or partly paid shares. In practice it is usually just the amount paid for the shares plus any unsecured loans made to the company.
The main advantage of running your business as a limited company is that you are likely to pay less personal tax than a sole trader. Limited company profits are subject to UK Corporation Tax, which for the current 2017/18 tax year is set at 19%. This is a 1% cut from the 2016/17 tax year. The Government has stated it’s intention to cut UK Corporation Tax to 17% by 2020. If you are the director and shareholder of a limited company, you may choose to take a small salary and draw most of your income in the form of dividends.
The biggest advantages of a Limited
- Low registered capital
Equity is at least 1 GBP compared to a limited liability company with 25,000 euros in registered capital
- Limitation of liability
Normally, private assets are excluded from liability
- Entrepreneurial restart after insolvency
Incorporation of a Ltd. after a bankruptcy possible
- Non-bureaucratic administration of the Limited
e.g. no notary required for changes to the statutes. That makes this company very entrepreneur-friendly
- Tax benefits
If a limited company also operates a permanent establishment in England, the profits earned there can be used to claim low tax rates and allowances. The first £ 10,000 are tax-exempt, with all profits beyond taxed at 26.97%, but still significantly lower than its German counterpart.
- Acceptance and awareness worldwide
The world's most common form of business is the English Limited
The biggest mistakes when starting a business abroad
Many agencies and law firms do not advise comprehensively or wrongly. Learn what to look for.
Gravity of the situation
Often, these law firms think foreign companies are half-silk, tax evasion is favored and mailbox companies are the leaders rather than the exception. This is true, however, only in some start-up agencies that do not have the necessary expertise. Self-proclaimed law firms that do not employ tax accountants or lawyers usually set up companies that are unlikely to operate legally. We set up and look after companies that can withstand tax audits and that are legally operated.
Do you have to live in the country where you start a company?
You can set up a company worldwide, as long as the respective country allows you as a foreigner to acquire shares in local companies or to act as a managing director. If this is not the case trustees can be used. For example, Cyprus allows every EU citizen to own and run a business. Nevertheless, trustees can be used for the purpose of identity protection. However, it is important that the management takes place locally, in the country in which the company is to be taxable. In addition, a permanent establishment must be set up. Without these, a major tax offices around the world do not recognize the company and in the worst case would require additional payment of corporate and business taxes plus late payment surcharges. We rent you a real office and set up a permanent establishment that meets all requirements beyond doubt.
Problematic Law firms: Secrecy is not regarded.
Some law firms bind customers with toggle contracts and exert pressure when the customer wants to close his company. If you are a client of a law firm that has established a legally flawed company, they can be blackmailed. Because in the case of a fiscal problem, law firms without a license are not bound by a duty of secrecy.
Migrating to a different law firm
We receive many inquiries from customers who already own a foreign company and are looking for a new law firm. The process of changing law firm is made often difficult on purpose. Therefore, we have developed a principle of trust. If you are not satisfied with us and want to change, you can do that at any time. The necessary documents (resignation letter), you receive from us standardized after founding. You are therefore protected against unexpected costs and you are free at any time to visit another law firm. So far we have not lost any customer to another law firm.
Privacy / Firm Location
Your accounting documents are kept safe with us. In addition, all electronic data is stored encrypted and accessible only by us, which are bound to a professional secrecy. All accounting records are also stored locally only. Neither authorities nor hackers are able to access this data.
There are quite a few locations in the world that do not charge taxes on companies or individuals, or only estimate a very low flat rate tax. But this can rarely be used without corresponding change of residence. If you are a resident of any major country, the relevant double taxation agreement is decisive. Providers who promise otherwise lead them to tax evasion, which in the case of discovery usually punishes severely. We advise against setting up companies in countries that have already been blacklisted by the OECD. The foundation is usually very cheap, but the tax consequences in your origin country can be devastating. Since the introduction of the automatic exchange of information between almost all major countries, an anonymous private account no longer exists.
We comply with the following code:
- Legally secure foundations
- No unexpected(hidden) costs
- No false promises
- Finding the right solution by focusing on your requirements
With this strategy, we have been on the market since 2013 and have not disappointed any customer so far. And we prioritize it in keeping that way. We strive to ensure that every client is satisfied and does not take risks with the solutions we provide for them, but only exploits legal opportunities. Starting a company that involves doing real business is more costly than a letterbox company, but it is the only way to save on taxes without risking legal action.
The British economy posted growth of 2.6% in 2014, thus leading the overall economic trend. An important part of this increase was contributed by the service industry in the United Kingdom. The services sector accounted for 79% of gross domestic product in 2014.
Andere Gesellschaftsformen die in England ebenfalls möglich sind
- Public Limited Company (in England PLC genannt und vergleichbar mit der Aktiengesellschaft)
- Limited Liability Partnership - LLP genannt
Tax burden comparison
Here are some examples of the tax differences between a highly taxed jurisdiction versus major tax havens.
|Belgian Limited (SPRL/BVBA)||English Limited (Ltd.)||Malta Limited (Ltd.)|
|Profit||100,000 EUR||£100,000||100,000 EUR|
|Corporate tax||33% including. surcharge tax rate 3% Totally 36,000 EUR(36%)||£16,000 (20% for profits up to £300,000 / 23% for profits over £300,000)||5,000* EUR (5%) Effectively reduced from 35%|
|Profit after taxes||64,000 EUR||£64,000||95,000 EUR|
|Tax burden||24.840,- EUR||£16,000||5.000 EUR|
Company formation England - How it works
Starting a business in Malta is easy and the founder does not have to travel to Malta. For the foundation only a certified ID or passport copy and a power bill is needed. Depending on the choice of bank and also a short CV or bank reference.