Know the Requirements & Benefits of Company Formation in UK

In the UK (United Kingdom / Britain), Private Limited Companies are governed by the Companies Act 1985. A Private Limited Company is a legal entity in its own right; which is separate from its Shareholders i.e. those who run it. Private Limited Company must be incorporated under the Laws of England and Wales or Scotland and Northern Ireland.

Some of the key benefits of formation of a company in the UK include its limited liability, likely tax advantages and lucidity in running a business. A shareholder's exclusive assets remain independent (unless they are secured against the business for financing) and his risk is reduced up to the extent of only the money invested in the company and if any unpaid shares.

There is no minimum capital required for a Private Limited Company. Private Limited Companies are required to have a minimum authorised share capital of £1 and are formed with only authorised and issued share capital. Even though the minimum issued capital should be one share of £1 but additional capital is usually issued to echo the soundness of the company. Unissued shares can be issued at any time later on by the Directors, subject to prior approval from the Shareholders. Shares in a Private Limited Company are transferred by private arrangement between the seller and the buyer.

In the UK, Private Limited Companies have hardly any restrictions or requirements, which make them a simple yet flexible solution for many businesses.

The major requirements of formation of a Private Limited Company are as follows:

• A registered office address is required at the time of incorporation.
• Minimum one Director and Shareholder is required, they do not need to reside in the UK i.e a Non-resident or Non UK citizen can be a Shareholder and Director of a UK company.
• At least one Director must be an individual.

There are a number of benefits associated with a Private Limited Company in the UK. Some of them are discussed below:

• The UK is a fertile ground for businesses that offer significant opportunities and capital for expansion thereby making it a remarkably beneficial spot for commercial development.
• It enormously fascinates investors from all around the globe to nurture their business.
• Foreign investors are treated with great connectivity. Take, for instance, direct aircraft facilities from all the prime cities in the world.
• The UK has kept pace with state-of-the-art technology and strong infrastructure development.
• It helps to remove trade barriers resulting in ease of doing business.
• It reduces the business costs.
• Manageable Tax System and regulations which are pretty simple compared to other foreign locations.
• The UK offers one of the world's highest standards of living, and a variety of cultural institutions and amenities thereby hiring skilled employees becomes easier.