Several clients have questions regarding whether or not there are any restrictions on non-UK residents setting up a company in the UK. We can assist our clients with the process of company formation from another country but there are some important issues that you may want to consider.

Registered Office

It is a legal requirement for all UK limited companies to have a registered UK address for their business. The registered office address is the one which will appear on all company documents and is publically available through Companies House. There are occasionally restrictions on UK mortgage or rental agreements about the use of a residential address as a registered office which it is advisable to investigate.

We can offer a Registered Office service for our address in Edgware, North West London. For £100+VAT per annum your company’s name will appear at this address, which you can use on company documents. In addition, we also offer free post-forwarding of statutory mail.

Bank Account

One of the most important considerations when setting up a UK company is the need for a bank account. It is a legal requirement in the UK to keep money related to the business separate from personal finances in a newly set up company. We have a link with HSBC that can help fast-track our international clients’ application for a bank account free of charge therefore reducing the hassle for you. Please note however that the bank has their own policy for the opening of accounts which is beyond our control.

Shareholders and directors

There are no legal restrictions relating to nationality in the UK as to who can be the director of a limited company therefore it is possible for any non-UK resident. However, it is important to note that under the Anti Money Laundering (AML) Regulations 2007, certain documents must be provided for directors and shareholders of a certain level. For any shareholders holding over 20%, in addition to all directors, we are required to obtain a form of identification and a proof of address. The identification can be anything such as a driving license or passport, regardless of which country it was issued. Ideal examples of proof of address are a utility bill or a bank statement.

It should be noted that these AML documents need to be legible by UK authorities. Therefore, although we are able to accept documents originating from another country, the text must be written in the Latin (Roman) alphabet. Additionally, it helps to only use these symbols when filling in the application.

Please note however that your right to work in the UK is a VISA/employment law issue that you are advised to seek further advice on should you wish to come to the UK to run your business.

If you have any further questions regarding company registration as a non-UK resident, please contact our customer support team on 0844 893 0808.

During our online company formation you will be asked to decide upon a number of shareholders and the number of shares attached to each of these shareholders. Through shares, the holder is entitled to a number of rights relating to the company, for example voting on decisions and potentially a dividend payment. At some point after setting up a company you may decide you want to include another shareholder.

One of the most common ways of increasing the number of shareholders of a limited company is through the transfer of shares. The transfer of shares refers to the movement of the rights from one member of the company to another existing or new member. Specifically, the transfer of shares refers to the giving or selling of shares between parties.  This is often the case for small companies or those that are recently incorporated. The alternative to this is often for a company to issue new shares directly,

Beyond any restrictions in the company’s articles of association, shareholders are free to act with their shares how they see fit. The transfer of shares can be for a monetary value (above or below their market price), or as a gift.  There may however be tax consequences to consider.

If you already have a fully set up company the first stage of the transfer of shares must be to make a contract between the party releasing (transferor) and the party receiving (transferee) the shares. Following this agreement, it is necessary to document the transfer. This needs to be recorded as minutes for the company register. In addition, the transfer must be registered with the company. As part of the process, the issuing of a share certificate is often an important aspect of a transfer. Share certificates are the legal document that prove the ownership of shares by a shareholder, and therefore are often vital to the transfer. There can also be stamp duty consequences and a stock transfer form is likely to be required in such circumstances.

It is important to note there are two types of title attached to shares: the equitable title and the legal title. The equitable title refers to the benefits that are associated to a share, for example the dividends. The party that holds the legal title is the legal owner. The changes in these different types of ownership occur at different periods in the transaction. The equitable title transfers when the agreement is made; the legal title when the change is registered.

Any restrictions on the transfer of shares will be highlighted in the company’s articles of association. A common constraint enforced by numerous companies is the power of the director to inhibit any share transfer transaction. However, there are a number of other factors that may limit transfers, such as being a part of the shareholders’ agreement. In addition to these restrictions, shareholders and potential shareholders should take into account the cost of stamp duty. Stamp duty is a tax levied on the purchase of shares and property in the UK.

If you want to complete a transfer of shares after you register a company Wisteria Formations can assist you with the process. If you have any questions please feel free to contact our customer support team on 0844 893 0808.

When you register a company there are a number of vital documents that a company will receive following the incorporation process. The primary documents are the incorporation certificate, the company register, and the memorandum & articles of association. Each of the documents has its own relative importance and uses throughout the company’s life.

The certificate of incorporation is conclusive evidence that the company is duly registered under the legislation and that all of the incorporation requirements have been met. It records the date on which a company is created and a limited company can carry on business and business and function as a company from that date. It also states the company registration number which is a unique reference number used in all correspondence with Companies House and on the company’s letterhead, website and order forms.

The company’s memorandum quite simply records the details of all the members of a company. By signing the memorandum, the members are agreeing to set up the company and obtain the number of shares that are outlined. Before 1^st October 2009, the memorandum had a more prominent role in the running of the company, for example through delegating rights to members. However, this information is now restricted to the company’s articles of association.

The articles of association are now the primary document for guiding the behaviour and governance of the company. The form of the articles can be changed in order to suitably fit the requirements of the company; however there is also the option of a standard set. This is known as the Model Articles, and simply sets out established regulations to guide the administration of companies. This basic document differs slightly depending on the type of limited company that has been formed. The Model Articles replaced the previous standard, known as “Table A”, following Companies’ Act 2006. Any company that has been formed with the unaltered version of the articles of association since 1^st October 2009 will have done so using the Model Articles.

A company may choose to alter its articles of association, and can do so in-line with certain conditions. Any changes to the articles are done so by a special resolution, and filed with Companies House within fifteen days of the decision regarding the alteration. Failure to follow the correct guidelines when altering the articles of association is a criminal offence, leading to a fine for the directors of the company. One such requirement is to ensure that all issued copies of the articles are correct; whether this means producing new copies, or simply attaching amendments as fit.

The significance that the memorandum and articles of association have for a newly set up company is in detailing the history of the company, as well as guiding future actions. Many people find that a bound copy of the memorandum and articles of association helpful if they are looking to bring in a shareholder at a later date. These documents help to evidence current shareholdings, and therefore can prove important in a transfer.  However absolute proof of ownership will require a share certificate.

If you have any further questions with regards to the documents received upon company formation, please contact one of our customer support team, on 0844 893 0808.

Company formation can be an exciting time for all of those involved, helping to turn an idea in your head into a fully set up company. However, for somebody without experience in setting up a company, it can also be a confusing time with many questions. One of the first that you’ll have to answer is what form you would like your business to take. Here is a guide to the different forms that a business can take in the UK:

Sole trader: this is a business that is run by one person, under a trading name or their own name. The business has unlimited liability, meaning that it shares a legal personality with the individual who is running it. The individual owns the assets, and is taxed on their income, but is also personally liable.

Partnership: this is a type of business that is run by at least two parties, which can be individuals or companies. The legal liability in a partnership is unlimited, and therefore lies with the partners. A partnership agreement can help outline the terms of the business, for example profit division between partners.

Limited company (LTD): a limited company is one for which the liability of the owners is separate from that of the company. After company formation, there is a separation of the legal identities of the owners and the business. This means that the owners are only liable for the money that they have invested (if limited by shares) or guaranteed (if limited by guarantee).

Public Listed Company (PLC): this is a type of limited company, though its shares are available for sale to the general public. These companies are sometimes listed on stock markets. It is important to note that private companies are able to list following their company registration, but the degree of regulation is much higher for public companies as opposed to private companies.

Limited by guarantee: a company that is limited by guarantee has members, as opposed to shareholders. The members guarantee an amount that they are liable for in the company, which is recorded. The liability of members is limited to this amount. This structure is common when setting up a company that is a charity.

Unlimited company: this is a company without the restrictions on liability of the owners, i.e. it has unlimited liability. This type of company can only exist in a private form, as the shareholders or members will be personally responsible for any debts that the company incurs.

As a business structure, the limited company has a number of advantages and disadvantages. Many set up company due to the image benefits that are attached, with incorporation often portraying size and reliability. In addition to the protection of personal assets, the option to sell shares also provides the owners with an extra source of capital. However, there is a greater administrative burden with this type of business. There are certain annual requirements that the company must adhere to, such as filing the annual return and annual accounts with Companies House.

If you have any questions after company registration, please don’t hesitate to contact our customer support team on 0844 893 0808.

A director of a newly set up company has a wide range of important duties and as such it is important that any newly appointed director is aware of them.

These include:

General duties – Acting within their authority, acting in a way which promotes the interest of the company and exercising reasonable care, skill and diligence.

Constitutional and Contractual Duties – Directors have a duty to act in accordance with any constitutional or contractual agreements, i.e. the Memorandum of Association, Articles of Association, Shareholder Agreements, Employment Agreements, Service Agreements, Staff Handbooks, Board Resolutions etc.

Duty to exercise independent judgment – Broadly this means that directors cannot allow others to influence their decisions or to make decisions for them. A director will not breach this duty if they: act in accordance with an agreement entered into by the company which restricts the exercise of the directors’ discretion, they act in a way authorised by the companies constitution or if they rely on the advice or work of others in making their decisions.

Duty to avoid conflicts of interest – Directors have a duty to avoid conflicts of interest or where one may arise to disclose this to non-conflicted directors and allow them to make the decision regarding the relevant transaction.

Duty not to accept benefits from third parties – Directors must not accept benefits from third parties for being a director, however they will not be in breach of this duty if the acceptance of such benefit cannot reasonably be regarded as likely to give rise to a conflict of interest.

Fiduciary duties – Directors have a duty in law to act in good faith for the best interest of the company after it has taken part in the company registration process; to act properly; to not make secret profits and to avoid conflicts of interest.

Management duties – It is the duty of the directors to manage the company with care as soon as company formation has taken place. This generally means that decisions and actions should be taken that benefit the company.

Compliance duties – The directors are responsible for ensuring that compliance matters are dealt with both accurately and in a timely manner. This includes such things as registering with the Information Commissioner; taking out insurance; completing the Companies House annual return and maintaining the Company Register.

Employment duties – A director is responsible for the employment of his/her staff. This includes not only their contractual and statutory rights but also their general wellbeing and safety whilst at work.

Dealing with taxation – Directors are responsible for calculating and accounting the tax that falls due after setting up a company (including PAYE, NIC, VAT, Duty and Corporation Tax). Penalties and fines can be levied for errors and for fraudulent tax evasion this can lead to criminal action by the state.

Insolvency – The directors are responsible for ensuring that the company is trading whilst solvent. Once they know that the company is insolvent they can be committing a criminal offence. The director has a duty to minimise the potential losses of creditors if the company is in financial trouble otherwise the director could be liable to prosecution.

If you have any questions in relation to duties of directors or on anything else about wishing to register a company, please contact our customer support team on 0844 893 0808.