Register Your Company in the UK: A Guide for Foreigners

by Counseal Team

Updated November 26, 2023

This guide provides foreign-based entrepreneurs with everything you need to know about registering your company in the UK- from choosing the right business structure and name registration to submitting necessary documents and complying with local regulations.

Whether you’re an experienced entrepreneur or starting up for the first time, this guide will give you peace of mind, knowing that all bases are covered during your registration process.

Who can set up a company in the UK as a Foreign-based Entrepreneur

In the UK, anyone can set up a company, irrespective of their nationality or residency status. However, to be eligible to register a company, an individual must be at least 16 years old and have a valid address in the UK. 

While, being a resident of the UK is not a legal requirement for setting up a company, banks often require that you have a resident director(s) or shareholder(s) before you can open a business bank account.

Starting a business in some sectors may require specific qualifications or licences. Entrepreneurs who wish to register their business in the UK can choose from several legal structures, such as sole proprietorship, limited liability partnership (LLP), and private limited company (LTD), among others. 

Each structure has its own unique features that cater to different types and sizes of businesses. It is important to do research and seek professional advice before settling on any structure that suits your business needs.

Besides researching and deciding on the best company structure, you would also have to make decisions on a business bank account. These will be discussed shortly.

Check the Right Company Setup for you

For setting up a business in the UK, choosing the right company structure is critical. 

There are different business structures available, each with its own set of benefits and drawbacks. 

Understanding these structures and selecting the one that best suits your needs is crucial for both legal compliance and financial viability. Along with deciding on a suitable business structure, choosing an appropriate name for your company is equally important. 

The name you choose must be unique and not similar to any existing companies operating in the UK market. It should also be easily recognizable by potential customers. Registering a unique name as a trademark can help secure your brand’s identity in today’s competitive marketplace. 

Following these suggestions will ensure that you get started on the right path towards building a firm foundation for your future success in entrepreneurial endeavours within the United Kingdom economy.

Here are the types of company structures:

Overseas Company

When expanding your business overseas, it is important to understand the legal requirements for operating in a new country. Starting an overseas company can come with benefits such as tax breaks and access to new markets, but it also involves navigating potentially complex regulations and compliance standards. 

In addition, it’s important to familiarise yourself with local laws and customs before launching an international venture. One crucial step in setting up an overseas company is deciding on the right corporate structure.

To register a branch of your company in the UK, it is required that you have some level of physical presence and conduct active business in the UK. Certain enterprises are not allowed to register as an overseas company, e.g.:

  • Unincorporated bodies
  • Limited partnerships
  • Partnerships
  • Government agencies.

If you don’t fall into this category and intend to register an overseas company, you would need to file the following documents:

  • A completed form OS IN01 with a filing fee of £20
  • A certified copy of the company’s constitutional/incorporation documents
  • A copy of the companies latest accounts
  • A copy of the latest set of accounts disclosed by the company as of the date of opening of the UK company.

You can choose to stick with your corporate name or another name under which you will conduct all your business in the UK. 

To properly navigate all applicable factors, such as taxation and administrative costs, when making this decision, consult a reputable lawyer or consultant who specialises in international business law to guide you through the process smoothly.

Social Enterprise

Social enterprise is a business model focused on achieving social or environmental goals rather than just maximising profits. These organizations aim to generate revenue through the sale of goods and services, which can then be reinvested to achieve their social objectives. 

Social enterprises offer a sustainable approach to addressing societal issues by promoting positive change and creating value for both people and the planet.  

In recent years, there has been an increased interest in social enterprise because of its potential to drive economic growth while also addressing critical issues such as poverty, inequality, and climate change. As a social enterprise, you can choose any legal structure for your company, provided you include your social purpose in your documentation.

Sole Proprietorship/Sole Trader 

A sole proprietorship, also known as a “sole trader,” is the simplest business structure for entrepreneurs in the UK. It involves one person who owns and manages a business independently. The owner assumes unlimited liability and is personally responsible for any debts or legal issues incurred by their business. 

Sole traders have complete control over their businesses, enabling them to make quick decisions and keep things simple. One benefit of being a sole proprietor is that setting up your business is relatively straightforward compared to other types of companies. 

You are not required to register with Companies House but must inform HM Revenue & Customs (HMRC) by registering for self-assessment to pay income tax on profits earned through your venture annually. 

A registered name may be used on marketing materials; however, it does not grant exclusive rights to use it legally, as limited company names do. To run their businesses successfully, sole proprietors should seek professional advice, such as from lawyers and accountants, who could help keep track of finances and stay compliant with regulations while minimising expenses.

Business Partnership

Business partnerships are a popular way for entrepreneurs to start and grow their businesses. A partnership involves two or more individuals sharing their skills, resources, and profits to achieve common goals. 

This type of business structure allows partners to share the workload and the risks involved in running a company. When forming a partnership, it is essential to establish clear roles and responsibilities for each partner. 

Partners must also have an agreement in place that outlines how profits will be split, how decisions will be made, and what happens if one partner wants to leave the partnership. It is advisable for partners to consult with legal professionals before entering into any formal agreements.

Overall, forming a partnership can provide many benefits for entrepreneurs seeking support and collaboration during their startup journey. 

However, it’s critical that partners communicate effectively and work towards shared objectives while adhering to legal requirements under UK law regarding partnership registration procedures. 

There are two types of partnerships that are registrable in the UK:

  • General partnership
  • Limited partnership

General Partnership

A general partnership is a common type of business structure in the UK, where two or more individuals agree to enter into a joint venture to generate profit. 

In this business arrangement, each partner has an equal share in the profits and losses of the company, as well as equal management control. The partners also share personal liability for any debts incurred by the business. 

To establish a general partnership, partners will typically need to register their company with Companies House by submitting relevant documents, such as a partnership agreement outlining how decisions are made within the organisation. This is, however, not mandatory. You can choose not to register with Companies House.

Registering with Companies House gives the partnership legal personality. If you choose not to register, it means you cannot own assets or enter into contracts in the partnership’s name. 

All accompanying partners must be registered individually or within another organisational entity for identification.

While a general partnership offers many advantages, including lower start-up costs and shared responsibility between the parties involved, due diligence should always be practiced before entering one. This is mostly because of the personal liability borne by each partner for debts and liabilities incurred by the partnership.

It’s highly encouraged that professional legal counsel be sought by both parties prior to establishing a general partnership in order to ensure all bases are covered from day one.

Limited Partnership

A Limited Partnership (LP) is a type of business structure that comprises one or more general partners who manage the company’s operations and handle its debt obligations, along with one or more limited partners who provide financial contributions but have no say in how the business is run. 

The limited partners receive a share of any profits earned by the partnership, but their personal liability is restricted to the amount they invested. 

LPs are often used in real estate ventures, private equity firms, and hedge funds. To establish an LP in the UK, you must register it with Companies House by submitting the forms and fees. 

The general partner(s) must also file a statement confirming their acceptance of this role and assume full responsibility for carrying out all legal requirements on behalf of the partnership. 

Unlike other types of business structures, such as Limited Liability Partnerships (LLPs) or Private Limited Companies (Ltd), an LP isn’t considered a separate legal entity from its owners. Tax liabilities and debts incurred by an LP fall directly on individual partners rather than on the partnership.

Limited Liability Company

One popular option for entrepreneurs is setting up their business as a Limited Liability Company (LLC). An LLC is an independent legal entity that separates personal assets from business assets. This means that if the company were to face any financial difficulties or legal issues, the owners’ personal finances would not be directly affected. 

Registering an LLC in the UK involves several steps, including choosing a unique name and registering with Companies House- which maintains records of all registered companies in the UK. 

Entrepreneurs will also need to decide on share allocation and prepare necessary documentation, such as Articles of Association and Memorandum of Association, before submitting them to Companies House. 

Although registering an LLC may seem like a complicated process, it provides many benefits, such as tax savings and lower risk exposure for its owners- making it worth considering for anyone starting out on their entrepreneurial journey.

Private Limited Liability Company

A Private Limited Liability Company, or LTD, is a popular business structure in the UK. It offers limited liability protection to its shareholders and directors, which means their personal assets are not at risk if the company incurs debts or liabilities. 

This type of company can have up to 50 shareholders, who must contribute a minimum amount of share capital during incorporation. The shares cannot be publicly traded. Instead, they can only be sold privately with the consent of other shareholders. To register your LTD in the UK, you need to choose a unique name that complies with regulations set by Companies House. 

You will also need to submit articles of association outlining your company’s internal rules and procedures and appoint at least one director who will take responsibility for running the business on behalf of its owners. Other documents required for registration include details about your registered office address and information about each shareholder.

In summary, registering an LTD involves careful consideration of important legal requirements, such as naming conventions, the appointment of directors, and documentation filing within defined timelines. These are all critical elements for any entrepreneur seeking lasting success in starting their dream enterprise in the United Kingdom market.

Public Limited Liability Company

A public limited liability company, or PLC, is a legal structure for businesses that allows them to sell shares to the public. This means that anyone can buy and own a part of the company by investing in its stock. 

PLCs are subject to strict regulatory requirements as they deal with public money and must ensure transparency and accountability in their operations. They are also required to publish annual reports and adhere to listing rules set by the UK’s financial regulator. 

Setting up a PLC can provide many benefits for entrepreneurs, including access to capital from investors, increased credibility with customers and suppliers, and potential tax advantages depending on the business’s specific circumstances. 

However, it requires substantial initial investment costs because of the legal fees involved in setting up the infrastructure required for selling shares publicly. It is crucial for entrepreneurs considering registering their business as a PLC to evaluate whether this structure aligns with their long-term goals before proceeding.

Unincorporated Association

An unincorporated association is a legal entity formed by two or more individuals who have agreed to work together towards a common purpose, such as a sports club, charity organisation, or social group. 

Unlike limited companies and partnerships, unincorporated associations do not have separate legal identities from their members. This means that the members are personally liable for any debts and contractual obligations of the association. 

Unincorporated associations can register with HM Revenue & Customs (HMRC) for tax if they meet certain criteria. They must be non-profit organizations that exist solely for charitable or recreational purposes. They also, must not distribute profits among their members. 

Although they may enjoy some tax benefits compared to other forms of business entities in the UK, unincorporated associations also face various challenges related to fundraising, governance structure, and liability issues. Therefore, it is important to carefully consider whether this type of structure is appropriate for your business needs before deciding on registration.

Reasons you should Open a Business Bank Account for Your Company

Having a business bank account is crucial for any company, big or small. It keeps your personal finances separate from those of your business and provides easy tracking of income and expenses. 

With a dedicated business bank account, you can maintain accurate financial records and keep track of things like invoices, taxes, payroll, sales, and revenue reports. You’ll also have access to specialised services, such as merchant accounts, that will make it easier to process payments.  

One advantage of having a business bank account is the increased level of credibility it gives your company in the eyes of customers and investors. A legitimate business should have its own banking arrangements; using personal accounts can hint at impropriety or a lackadaisical attitude towards one’s company affairs- it doesn’t inspire confidence among stakeholders! 

When making transactions with lenders or the government for tax purposes, they expect businesses to do so via proper channels, which means using an official business bank account.

To sum up, why you should not take opening a business bank account lightly: 

  • It ensures better bookkeeping abilities through the separation of personal funds from business ones. 
  • It presents many benefits, including easier record keeping 
  • Improved financial standing by projecting professionalism 
  • Potential trustworthiness towards creditors/investors/trading partners

These, along with other advantages, are vitalizing remedies for both practical and strategic concerns businesses often face in their early days!

How to open a Business Bank Account in the UK

Opening a business bank account in the UK is an essential step for any entrepreneur wishing to conduct financial transactions, receive payments, and pay vendors. 

To open a business bank account, you will need to provide your registration documents as proof of your identity and the address of your company. You will also be required to present identification, such as passports or driving licences.  

It is useful to research different banks’ offerings before choosing one that suits your business needs best. Most high street banks offer free banking for new businesses for over 12 months, while others charge fees but might offer other benefits like overdrafts or loans. 

Some banks may require a minimum monthly balance or limit deposits per month, depending on the size of your business. It is important to inquire about any such requirements when considering opening an account with them. 

With all necessary documentation submitted, most banks can process applications within approximately two weeks. This gives you enough time to focus on operations instead of spending extensive amounts of valuable time on banking formalities and following legal requirements. It conclusively leads to setting up a sound foundation for your startup.

Frequently Asked Questions (FAQs)

How much does it cost to register a company if I do it myself?

Online registration costs £12, which takes about 24-48 hours, while registration by post costs £40 and will take 8-10 days for approval or refusal.

Can a foreigner open a limited company in the UK?

Yes. You do not have to be a UK resident to register a company with Companies House. If you do not have a physical address you can use, you can opt for a virtual address.

How do I find information about a company in the UK?

You can find any information you want about a company on the Companies House website.

Do I have to register with Companies House online?

You can choose to register by post, which costs more than online registration.

How long does it take to register a new company?

This depends on your choice of registration. Online registration takes 24-48 hours, while registration by post takes 8-10 days.

What documents will I receive upon the formation of a company?

The documents you will receive from the companies house are:

  • Certificate of Incorporation
  • Memorandum of association
  • Articles of Association

Can my limited company be formed by just one person?

Yes, one person can own 100% of a limited company. You just have to be at least 16 years, not a discharged bankrupt, or a disqualified director.

How many limited companies can I own?

You can register and own as many limited companies as you desire. You should, however, keep in mind the obligations that come with running each of them concurrently, e.g., tax returns, annual maintenance fees, business licenses, and so on.

What are the annual filing requirements for a limited company?

You need to file a confirmation statement annually with the companies house. You must check and confirm:

  • Company name and registration number
  • Registered office address
  • SAIL address
  • Location of company records
  • Details of appointed officers (directors and company secretary)
  • Information about PSCs (people with significant control)
  • Principal business activities (SIC codes)
  • Statement of capital (i.e. issued shares)
  • Trading status of shares
  • Shareholder information
  • Exemption from keeping a register of people with significant control

Online submission costs £13, while postal submission costs £40.

Who is a Company Director?

A company director is any person registered as a director of a particular company at the companies house.

Can I run a business without registering?

Yes, if you are running your business as a sole trader, but you will need to register with HMRC for tax returns. If you are running a limited liability company or limited liability partnership, you must register with Companies House.

Up next:

Pharmacy Business in Nigeria

Start a Pharmacy Business in Nigeria: 4-Step Guide

Updated on
Thinking of opening a pharmacy in Nigeria? It’s a great opportunity in a thriving industry, with potential for both financial success and making a positive impact in the community. The pharmacy sector has a significant impact on the economy and healthcare system, with high demand and job opportunities. Want to know more? Here’s the resources to help you get started and make your dream a reality.