A. Private Company Set – Up in UK:-

The Company proposed to be incorporated is required to be registered with “Companies House” (here, in India, we call it as “Registrar of Companies” in usual terms.). The Company in legal terms is separate from the people who run it, has separate finances from your personal ones and can keep any profits it makes after paying tax.

Formation of Private Company In UK

Key Requirements to incorporate a Private Limited Company:

1. Selection of Name: Choosing a Name which should be as per guidelines as prescribed thereunder the Rules.

2. Registered Office Address: Your registered office address is where official communications will be sent, for example letters from Companies House.

The address must be (i) a physical address in the UK in the same country the Company is registered in, for example a Company registered in Scotland must have a registered office address in Scotland.

4. Appoint directors and a company secretary

3. Appointment of a Director: The Company must have at least one director. Directors are legally responsible for running the Company and making sure company accounts and reports are properly prepared.

Eligibility:

  • A person must be 16 or over aged and not be disqualified from being a director.
  • A Company can be a director, but at least one of your Company’s directors must be a person.
  • Directors don’t have to live in the UK but Companies must have a UK registered office address.
  • Directors’ names and addresses are publicly available from Companies House. You can stop your home address from appearing on the register if you or your family are at risk of abuse or harm because of your company’s work.

4. Appointment of Company Secretaries: A Company Secretary is not required for a Private Limited Company. Some companies use them to take on some of the director’s responsibilities.

The company secretary can be a director but can’t be:

  • the company’s auditor
  •  an ‘undischarged bankrupt’ – unless they have permission from the court
  • The restrictions placed on a person when they’re made bankrupt usually end when they’re free from their debts (known as ‘discharged’). You can check if someone has been discharged using the Insolvency Register.

Even if you have a company secretary, the directors are legally responsible for the company.

5. Shareholders: A company limited by shares must have at least one shareholder, who can be a director. If you’re the only shareholder, you’ll own 100% of the Company. There’s no maximum number of shareholders.

6. Memorandum and Articles of association:

  • A ‘Memorandum Of Association’ is a legal statement signed by all initial shareholders agreeing to form the Company and;
  • An ‘Articles of Association’ – written rules about running the company agreed by the shareholders, directors and the Company Secretary.

7. Taking money out of a limited company: How you take money out of the company depends on what it’s for and how much you take out.

Salary, expenses and benefits:

If you want the company to pay you or anyone else a salary, expenses or benefits, you must register the company as an employer.

The company must take Income Tax and National Insurance contributions from your salary payments and pay these to HM Revenue and Customs (HMRC), along with employers’ National Insurance contributions.

If you or one of your employees make personal use of something that belongs to the business, you must report it as a benefit and pay any tax due.

Dividends

A dividend is a payment a company can make to shareholders if it has made a profit. You can’t count dividends as business costs when you work out your Corporation Tax. Your company must not pay out more in dividends than its available profits from current and previous financial years. You must usually pay dividends to all shareholders.

Tax on dividends: Your company doesn’t need to pay tax on dividend payments. But shareholders may have to pay Income Tax if they’re over £5,000.

Directors’ loans: If you take more money out of a company than you’ve put in – and it isn’t salary or dividend – it’s called a ‘directors’ loan’.

If your company makes directors’ loans, you must keep records of them. There are also some detailed tax rules about how directors’ loans are handled in UK.

P. T. O.

Key Noting Points:

Designated Members: Every limited liability partnership must at all times have at least two, formally appointed designated members. (Designated members are analogous to the executive directors and the company secretary of a company). The designated members are responsible for:

  • appointing an auditor (if one is needed);
  • signing the accounts on behalf of the members;
  • delivering the accounts to the Registrar;
  • notifying the Registrar of any membership changes or changes to the registered office address or name of the limited liability partnership;
  • preparing, signing and delivering to the registrar an annual return (Form LLP363); and
  • acting on behalf of the limited liability partnership if it is wound up or dissolved.

Designated members are liable in law for failing to carry out these legal responsibilities. If there are fewer than two designated members then every member is deemed to be a designated member. (The limited liability partnership may have decided that all members will be designated members or that only some members will be designated). With the agreement of the other members, a member may become a designated member at any time. Designated members enjoy the same rights and owe the same duties towards the limited liability partnership as any other member. These mutual rights and duties are governed by the limited liability partnership agreement and the general law. However, the law also places additional responsibilities on designated members.

Members: There can be an unlimited number of members. Capital: The minimum capital contribution is £ 2.

Choosing a Name: The LLP has to choose a name as per the guidelines as prescribed thereunder the Rules.

Registered address (also known as your principal place of business): Your registered address (known as principal place of business) is where official communications are sent, for example letters from HM Revenue and Customs (HMRC). It is compulsorily required to be in existence in the respective country in UK where LLP is incorporated.

Restrictions on Trading: For specified categories, which include banking, insurance, financial services, consumer credit related services and employment agencies there are restrictions.

Taxation: LLP itself will not be liable for taxation on profits or gains arising within the partnership, but the profits or gains will be assessed to tax separately on the individual partners. In order to remain this status a LLP must be a commercial venture operating with a view to profit that is not in liquidation.

Compliances: Financial Statements Required: All UK LLPs are required to file annual accounts with the Registrar of Companies which contain details of.

  • Turnover; balance sheet signed by the designated members: an auditors’ report signed by the auditor (if appropriate); notes to the accounts; and group accounts (if appropriate).
  • profit and loss for the year before members’ remuneration/profit shares.
  • where the profit figure exceeds £200,000, the amount attributable to the member with the largest profit share.
  • aggregate capital or loans put in by members and aggregate amounts withdrawn during the year by members.

Accounts must be accompanied by an auditor’s report which clearly states the name, date signature of the auditor (unless the LLP is exempt from audit).

Author Bio

Qualification: CS
Company: N V Gajjar & Associates
Location: Rajkot, Gujarat, India
Member Since: 22 Jun 2017 | Total Posts: 5
Specialization in Corporate Law matters & Valuation of Financial Assets View Full Profile

My Published Posts

More Under Company Law

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

September 2021
M T W T F S S
 12345
6789101112
13141516171819
20212223242526
27282930