Private Limited Company

A limited company is a separate legal entity created by incorporation by The Registrar of Companies and once incorporated a certificate is issued with the company registration number.

Its profits, losses, assets and liabilities are its own. The company is owned by its shareholders and run by the directors whose assets are protected from loss if the business should fail. This is sometimes referred to as limited liability.

Because a company has a life of its own the business can continue despite the resignation or death of any directors or shareholders and the sale of the business or the introduction of outside investors is simplified. Reasons for wanting or needing a limited company may include ownership of property, obtaining outside finance, taxation, status and protection from risk.

A registered company is a corporation ie. a separate legal person distinct from shareholders. A Limited Company separates business risk from the shareholders personal assets whereas partners and sole traders remain liable personally for all business debts.

A private limited company can be tailor made to suit individual needs, alternatively a ready made company can be acquired immediately.

Our standard UK Limited Company Incorporation Package includes all of the necessary documents to get your company up and running.

Direct Taxation of UK companies

UK companies are tax-resident in the UK for Corporation Tax.

If their activity is outside the UK, then they can apply to be tax resident in another country, and therefore not be subject to UK Corporation Tax.

There are three easy rules:

• If no tax is paid in other countries, then the company is UK tax residence by default
• If there is a tax treaty between the country of trading and the UK, then the terms of the tax treaty apply
• If there is no tax treaty, the UK will give double tax relief unilaterally

UK corporation tax for small companies is expected to be 21% in the medium term.

The VAT situation of UK companies

A UK company is not formed with a UK VAT number, but needs to apply for a UK VAT number if it has substantial activity in the UK. If the company has substantial activity outside the UK, but in another European jurisdiction, the company may need to apply in that jurisdiction for a VAT number there.