Starting a Business in the United Kingdom

Find out how to go about starting a new enterprise in the United Kingdom; understand the type of legal presence you might require and how to choose the right entity...

Type of Legal Presence: Choice of Entity

There are two principal ways for a foreign investor or company to carry on business in the UK. You may:

  1. register a UK establishment or
  2. incorporate a private limited company

UK establishment

Every overseas entity that has established a place of business in in the UK from which it does business must register a UK establishment. Within a month, you must submit the following documents to the UK Registrar of Companies:

  • a completed form (Form OSIN01) that provides such information as: 
    • the official name of your company
    • the country of incorporation
    • the address of the establishment in the UK and overseas
    • details of the directors and secretaries including the extent of their authority to represent your company
    • details for the person authorised to accept service of process on behalf of the company
    • details of the permanent representatives of your company in respect of the business of the UK establishment and the extent of their authority to represent the company
  • a certified copy of your company’s constitutional documents i.e. articles of the company (see below)
  • a certified translation of those documents (if they are not in English)
  • a copy of the company’s latest set of audited accounts (if the company is required to file accounts publically in its country of incorporation)
  • a certified translation of those accounts and the company’s constitutional documents (if they are not in English)
  • the registration fee (£20 for the standard service; £50 for same day registration).

You have the option of establishing a UK establishment through a new overseas subsidiary of your company. This has two benefits:

  • you would not have to register your company’s accounts, merely the subsidiary’s
  • your company’s liability would be limited

Private Limited Company

A private limited company is:

  • a separate legal entity
  • with its own limited liabilities

If you choose to set up a private limited company as a UK subsidiary, your company will not be liable for the debts and other liabilities of the subsidiary beyond the amount of the subsidiary’s share capital, unless your company has provided an express guarantee in respect of the subsidiary’s liabilities.

On the one hand, a private limited company:

  • is much more substantial than a UK establishment and thus offers far greater assurance for customers and others who come into contact with the business
  • offers flexibility of ownership (it can have one or more shareholders).

On the other hand, it must comply with accounting, audit and regulatory requirements, including:

  • notifying the Registrar of Companies of any event-driven changes to the company (for example, resignation and appointment of directors, a change in the share capital and a change of registered office address)
  • having at least one natural director (i.e. an actual person rather than a corporation)
  • appointing auditors, unless its turnover and balance sheet total are below specified thresholds
  • keeping a register of its shareholders (known as members), including their names and addresses, the number and class of shares they hold, details of the rights attaching to the different classes of shares and the date when they became members of the company
  • keeping a register of charges (mortgages and other secured interests)
  • keeping a register of its directors and secretary (if it chooses to have one) and a register of directors' and secretary's residential addresses
  • delivering to the Registrar of Companies (on Form AR01) an annual return, no later than the filing deadline, which is 28 days from the made-up date of the annual return
  • delivering to the Registrar of Companies statutory accounts for each financial year/period, no later than the filing deadline for delivery of the accounts, which is nine months from the end of the accounting reference date

There are penalties for not meeting these obligations including automatic financial penalties for the failure to file statutory accounts by the due date. Continued non compliance can lead to the compulsory dissolution of the Company by the Registrar of Companies with potential liability for the directors.

Other options

It is also possible to form:

  • limited partnerships
  • limited liability partnerships in the UK or in a European country
  • a European company Societas Europea (or SE)
Information supplied by PriceWaterhouseCoopers PWC, 1 Embankment Place, London, WC2N 6RH Contact: Mike Curran | Tel: 0207 213 8190 | e-mail or Dipan Shah | Tel: 0207 804 0685 | e-mail