Can a Non-Resident Form a Limited Company in the UK?

Even if you are not a resident in the UK, you may be looking to incorporate your company here. Luckily, you do not need to be a resident of the UK to form a limited company. But there are some other things you need to be aware of. This article will give you a brief overview of some of the advantages of incorporating in the UK, the importance of your company’s registered office address, and the incorporation process.

Incorporating in the UK 

The UK is a great country to incorporate your company. Compared to other countries, it is:

• fast (taking as little as 10 minutes to complete the paperwork); 
• cheap (as little as £12); and 
• relatively easy to do so (depending on the particulars).

Likewise, your company will benefit from lower taxes relative to other nations, less onerous reporting requirements, and a legal system that is overall quite advantageous to enterprises.

Importantly, you do not have to be a national or even a resident of the country to incorporate and form a limited company. However, there are some important legal and practical considerations to consider. We will consider them in turn. 

Registered Office

You do not need to be a UK resident to form a limited company in the UK. However, your company must have a registered office within the island nation to incorporate in the UK. Hence, you must have an address within the UK to which all official correspondences can be sent.

Additionally, you must consider which jurisdiction you wish to incorporate. The name, “the United Kingdom,” suggests it is a single country. However, it is composed of four nations: England, Wales, Scotland, and Northern Ireland. Far from being a historic quirk, you must be registered within the country you wish to be incorporated.

The practical effect is that, provided you have such a place and that you can monitor all your company’s correspondences sent to the address, you are free to incorporate. Therefore, you may consider instructing a law firm or accountancy firm to serve as your company’s registered office. 

The Incorporation Process

Importantly, you must incorporate your company through a registration process. This is done by preparing and filing certain key documents with the Registrar of Companies House. Companies House is a government body largely responsible for administration company law in the country.

By far, the most common kind of company in the UK is a private company limited by shares. The necessary documents to incorporate this company are:

• an application for registration;
• the company’s articles of association; and
• the memorandum of association.

Application For Registration

You will need the following information to complete the application for registration:

• the type of company you are registering — in almost all cases, it will be a private company limited by shares;
• your company’s name — you should cross-check this name against any other existing companies and prohibited names (such as those containing swear words or suggestive of recognised terrorist groups);
• the address of the company’s registered office — as above, it must be in the appropriate jurisdiction;
• a statement of capital and initial shareholdings — generally, this refers to how many shares your company will issue and at what value per share;
• a statement of your company’s proposed officers — this is usually the list of the company directors and each of their addresses (which need not be in the UK). There need only be one director, and this information will usually be publicly available; and
• a statement of those that will have “significant control” at the time of incorporation — this refers to any shareholder with 25% or more ownership of the company.

Articles of Association (“Articles”)

These refer to the internal rules which will govern your company. They primarily dictate the director’s obligations to the company and any limitations on their powers. As such, the Articles comprise the most crucial set of documents.

Generally, Articles come in three different forms:

• model articles of association;
• amended articles of association; and
• bespoke articles of association.

For most small companies, the model articles suffice. However, some company owners may wish to amend certain elements of the model articles or create tailored ones. Notably, there are certain legal rights of shareholders and obligations on directors that you cannot amend through the Articles.

The Memorandum of Association

This is something of a formality, but each company must have at least one person who states that they agree to take one share each. When you agree to this, you become a subscriber, which essentially just means you are the first shareholder(s).

Assembling and Filing the Necessary Documents

It is possible to do this by yourself through a government web service. However, given that you are not a resident of the country and will not be in actual receipt of any correspondence sent to the registered office, you may prefer to instruct a solicitor, accountant, or “company formation agent” to file the paperwork. 

After Incorporation

Assuming you nominate yourself to be one of your company’s directors, you will assume a great number of responsibilities and obligations. As a company director, your duties generally include:

• not to act without authorisation or in excess of what your company articles permit;
• a duty to promote the success of your company and exercise independent judgment and reasonable care, skill, and diligence;
• a duty to avoid conflicts of interest and not to accept bribes or other third-party benefits;
• a requirement to maintain company records, including accounts and share capital transactions; and
• an obligation to not mislead creditors.

Other Practical Considerations

Additionally, you will need to consider how you will service your banking requirements. For example, you do not need to have a UK bank to incorporate a company, but practically it may benefit you to do so. Unfortunately, most banks in the UK offering business accounts require a UK address and some right of residency, such as through a visa. Although, some challenger banks offering online-only services may have less burdensome restrictions.

Further, you will not be able to take full advantage of certain tax avoidance measures available to UK residents, like the personal allowance. You may also have additional tax liabilities, such as to the nation you reside in. An exception is if you are exempt under double taxation agreements between the UK and your country of residence.

Key Takeaways

You do not need to be a resident of the United Kingdom to incorporate a company in it. However, your registered address must be at an address in the country. Since all official correspondences will be sent to this address, and you will be deemed to be in receipt, you need to have this address monitored. Therefore, it may be beneficial to seek the assistance of a solicitor or accountant.

If you need help with incorporating your business or advice on how to form a limited company, our experienced business lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.

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