A UK Limited Company and UK Limited Liability Partnership in the United Kingdom are registered according to the laws of the UK Limited Companies Act of 2006 and UK LLP Act 2000, respectively. The UK Limited Company Act 2006 supersedes other company acts for UK limited liability companies in the UK. UK limited liability companies and UK limited liability partnership are business structures where members or shareholders have their liability limited to the contributions which they have made or invested in the company. Forming a UK Limited company has many advantages for owners and is easy to incorporate.
During UK limited company formation, our clients often ask, what is the best limited company structure for me? When considering starting up and registering a UK company, it is important to consider the best means of maximising profits and the objectives of the company. This can determine the best business structure for you. Ltd company formation is affordable and can be completed quickly.
In UK limited liability registration, the UK limited liability company, which is limited by shares, is the most commonly registered Company. Presently in the United Kingdom there are 3 types of UK limited liability companies being offered:
- UK limited company limited by guarantee (Ltd)
- UK limited company limited by shares (Ltd)
- Public limited Companies (PLC)
In limited liability incorporation, UK limited liability companies and the UK limited liability partnerships can be formed by any one going into business to make a profit. The UK Company and UK LLP business structure can be described as a simple and flexible structure. In cases where one member of the company decides to pull out the company UK can continue to function.
Limited Liability Company in UK: Membership
It is important to understand what a limited company’s membership is like and the roles they play in running the Ltd Company.
In company registration for a UK ltd. company just one company director is needed. Directors/members for UK companies and LLP’s can be individuals and corporations. But a limited liability company must have at least one director who is an individual, while the limited liability partnership requires at least two members for LLP formation. A director’s role in a limited liability company can be that of a managerial position in cases where a director is appointed to run the ltd company. Shareholders of limited liability Company in the UK can be directors.
We recommend appointing a Company Secretary for the UK ltd company, however this is not mandatory. A Company Secretary in a limited liability company can make carrying out certain tasks, easier. Although there are no specific duties outlined in the Companies Act, the role of Company Secretary includes recording minutes of meetings and ensuring that the members receive any updates in resolutions passed, informing the Companies House of any changes within the company and maintain company records among others.
Limited Liability Companies (UK) — Taxation and Filing Requirements
After formation, UK limited liability companies are obligated to prepare and file financial records at the end of each financial year. All UK companies and UK LLP accounts must be submitted to the Companies House and the HMRC. A financial year is regarded as twelve (12) months. The following must be made available at the end of each financial year:
- A Director’s Report
- A Profit and Loss Account
- An Auditor’s Report- small companies are exempted from filing auditors report and have the option to file abbreviated accounts*
- Balance Sheet
* companies which qualify for exemptions must meet two of the following conditions: a turnover of less than £6.5 million, employ no more than 50 or a balance of no more than £3.26 million on the Balance Sheet.
A UK Limited company must pay corporate tax on any profits the company has made in a financial year. UK companies which are classified as “small” (Profits of no more than £300,000) will pay corporate taxes at the rate of 20%. A 24% tax rate is levied on companies with profits of £1.5 million and up.
It is important that you register with HMRC to pay taxes. UK companies must register as soon as the company starts trading or not later than 3 months after UK limited liability company incorporation.
To take care of your UK limited company and UK limited liability partnership accounting needs, it is recommended that an accountant and or bookkeeper be employed after company registration. This ensures that tax compliance requirements are met.
UK Limited Liability Company: Benefits
Trading through a limited liability company in UK provides many benefits for the owners/shareholders of the company, which cannot be achieved through other business structures.
- One of the major benefits of trading through a limited liability company is that the personal assets of the shareholders, directors and other company officers will remain untouched in case of company bankruptcy. The assets of the UK limited company will be used to pay any debts which the UK limited company may have to settle.
- The costs of running a UK ltd company and UK LLP are very low.
- Many businesses prefer to trade with UK companies due to the additional confidence the legal entity status provides. This is one of the reasons why Ltd Company and LLP are the most popular business structure in the UK.
- Tax planning and tax savings are very important to all businesses. Corporation tax for a limited liability company starts from 20%.
UK limited liability company registration will give your better business opportunities. UK limited liability company taxes are set at low rates, which increase the returns for the shareholders.