REGISTERING A COMPANY IN ENGLAND
Starting up and running business in England is a very common professional activity, also among Poles. The British procedures are entrepreneur-friendly. One of most common issues is finding an adequate legal regulations for our business. The UK law has four main types of business activity – single person business activity – Sole Trader (self-employment), professional partnership – Partnership, Limited Liability Partnership (LLP), company. Companies can be divided into: company limited by shares (LTD), company limited by guarantee, limited joint-stock partnership, or joint-stock company.
Types of business activity in the UK:
Sole Trader (self-employment)
Self-employment – Self Employed/Sole Trader is one of the most common and most basic forms of running business activity in the UK. An equivalent in Poland is sole proprietorship. Sole Trader does not have legal personality, which means that an entrepreneur is responsible with his or her own whole property for the company’s liabilities. Sole Trader is obliged to pay natural persons income tax, as well as pay social insurance contribution and submit periodical tax settlement. Among the privileges of sole traders there is a possibility to employ workers on the basis of employment agreements and bond into partnerships
Partnership (professional partnership)
An equivalent to the Polish professional partnership is a Partnership in England that can be formed by at least two sole traders. This type of business activity does not have legal personality. Partners are solidary liable with their whole property for the company’s liabilities. When debating the liability, it is not important who incurred it. Partners manage the partnership together and share the profits.
LLP – Limited Liability Partnership (partnership with limited liability)
An English Limited Liability Partnership (LLP) can be formed by at least two entities – either natural or legal persons. A limited liability company is a Polish equivalent (PL: Sp. z o.o.). A very important aspect is defining the notion of the liability of partners of a limited liability partnership. It has to be observed that partners are liable only for their own contributions or given sureties. Partners are not liable with their own property. It is a very important element that differentiates Limited Liability Partnership from general partnership or self-employment, in which cases an entrepreneur is responsible with his or her whole property, including the personal one.
A shareholder of a company can be both natural and legal persons. A company has to be registered and have at least one director (in case of PLC – Public Limited Company – at least two directors).
There are a few types of companies:
- LTD – Private Company Limited by shares (company limited by shares): the liability of shareholders is limited to the amount of their shares,
- LBG – Private Company Limited by guarantee (company limited by guarantee): a company in which every shareholder contributes a surety bonds in case of the company’s liquidation,
- ULC – Private Unlimited Company (limited joint-stock partnership): the liability of shareholders throughout a company’s business activity is limited to the property of a company, and during liquidations partners are liable with their whole property,
- PLC – Public Limited Company (joint-stock company): partners are liable only with the amount of their contributions, and company’s shares are available in public trading.
Starting up a business in England – benefits:
The UK is an entrepreneur-friendly country. The laws and regulations aim to provide possibly the most beneficial conditions with simplifying register or settlement procedures for companies. Thanks to it, entrepreneurs may dynamically develop their business activity.
It cannot be denied that in comparison to the Polish system of registering or running business activity, English procedures are much more transparent for an entrepreneur.
Another benefit is the fact that social insurance contributions or taxes are lower, and personal allowance threshold is higher than in Poland.
The benefits noted above are the main reasons why more and more entrepreneurs decide to start up or move their businesses to England instead of staying in Poland. However, an insufficient knowledge on English law or lack of proficiency in communicative English may seriously hinder the process of starting up and running a business activity in England. EGIDON is here to answer all needs of entrepreneurs, and offers complex help and advisory services in setting up companies on the territory of the UK