Why Registering a Company In the UK Is an Excellent Idea
The UK is one of the top ten economies worldwide making it an ideal destination for foreign investors. Investment opportunities exist for local investors as well. You might also have a business idea that is suitable for the UK market. Register a company so that you can actualize this idea. Registering it leads to numerous benefits. For example, it limits your liability because companies are separate legal entities. That means your assets are secure even if the business accumulates heavy losses and debts.
UK company incorporation minimizes your tax liability as well. Imagine that you were earning over £150,000 as a sole trader. The tax rate for this level of income is 45%. However, the corporate tax rate in the UK is at 19%. That means you can reinvest more profit as a company than you would as a trader. Another benefit of registration is that it enhances your level of credibility as you interact with your stakeholders. For example, financial institutions lend more money to registered firms than they do to sole traders or partnerships. Suppliers prefer working with companies as well.
In summary, UK company incorporation is an excellent idea because the UK is a booming economy. That means your chances of recouping your investment in addition to generating profit are high. Your liabilities will decrease as well, and your level of credibility will soar.
UK Company Incorporation: The Process
Step 1: Choose a Name and Fulfill the Requirements
Select a name that resonates with your audience. For example, it should be free of profanities or awkward interpretations. Search the Companies House registry to make sure that no other company goes by the same name. Finally, secure the domain for that name. The details that you will need for UK company incorporation besides the name include an address in the UK. A SIC code that defines your planned activities is also necessary. You have to share details of your shareholding as well. Lastly, the names of the directors are required.
Step 2: The Memorandum & Articles of Association
A Memorandum of Association outlines the company’s relationship with its shareholders. For example, the liability clause shows that a separation exists between the company’s liabilities and those of the shareholders. Other provisions include a name, objective, association, and capital clause. In contrast, an Article of Association outlines the governorship structure of the company. For instance, it will cover the issuance of shares, the appointment of directors, and the company’s dividend policy. It will outline winding up procedures as well among other things.
Step 3: Filing Documents with the Companies House
Online registrations are possible. Other ways of filing are through an agent, third-party software, or the post. They have different costs and advantages. For example, online registration would cost you £12 while parting with £40 is necessary if you register through the postal office. The final phase is waiting for approval if you have met all the requirements. This approval would take 24 hours if you did it online or eight days if you did it by post. However, you can get feedback in 24 hours for postal applications if you apply by 3 pm and then pay £100 instead of £40.