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By miguel-ingles
- In Uncategorized
The UK is one of the most advanced economies in the world and a booming market. Due to this, the country is attracting entrepreneurs from other nations and continents to set up their businesses here. In this article, I will explain how to form a company online in the UK.
Prior Considerations before Forming a Company Online in the UK
Firstly, if you are the director or shareholder of a company, you do not need to live in the UK. This is not a requisite for authorities. Secondly, it does not matter whether the company was set up in the UK, is a branch of a foreign multinational corporation or a small business a citizen from another country has established, you must place the registered office and the tax address of the company in British land.
Secondly, you should consider which business structure is more suitable for your corporation. These are the four main legal organizations, although there are others: sole trader, limited liability company, partnership and limited liability partnership. Each one has their own characteristics. You can find them in this article. Their main features are the following: as a sole trader or limited liability company, you will not need any more partners, while for forming a partnership or limited liability partnership, authorities require you to have, at least two members. Also, the liability of limited liability companies and limited liability partnerships is limited, while sole traders’ and partnerships’ is full.
You must also choose a name for your company. It must comply with the rules of competent authorities. In addition, it must be unique and not share similarities with any other registered business’ denomination.
At last, if our corporation earns income superior to 90 000 GBP, you must sign it up into VAT. Then, you have to declare each quarter the money the company has gathered as VAT. Nonetheless, this can bring you several benefits. For example, it will allow you to deduct yourself VAT for products you have bought as “business purchases”.
How to Form a Company as a Sole Trader Online in the UK
As well as everything mentioned in the last section, you must only comply with two requisites: the first will be getting a British National Insurance Number. The second, to pay Income Tax each year.
I must mention that this corporation model will allow you to carry out the business activity under your own name, which will appear in official documents. However, this is not advisable, because having your name in public records can affect your personal privacy.
How to Form a Partnership Online
The first step will be to register each of its member into His Majesty’s Revenue and Customs (HMRC). Additionally, it must name one of the participants as the “nominated partner”, who will be in charge of completing and filing the business’ tax declarations to the authorities.
The company must also prepare its annual accounts and share the profits and losses among the partners, according to profit-sharing ratio.
You must know that each member must register into the National Insurance and pay Income Tax.
How to Form a Limited Company Online
The first measure will be to appoint a director or legal representant of the company. In case there is only one participant, they will serve both as the director and principal shareholder.
The next step will be to write the Memorandum of Association and the Articles of Association. These must feature key aspects of the corporation, like its legal name, registered office or the object of the company, among other aspects. The director must send these documents to the Companies House, the British commercial register, where the company will be registered.
At last, you must also sign it up into HMRC, for the payment of Corporation Tax.
How to Form a Limited Liability Partnership Online
This business structure is a mix of the previous two. As in partnerships, the company must appoint nominated partners, who will assume extra responsibilities. However, in this case, it needs to be two of them. Moreover, LLPs do not have to pay Corporation Tax, its members will pay Income Tax.
That being said, you must register the business into the Companies House and HMRC, and you must file the annual accounts to both.