STATUTORY REQUIREMENTS OF A U.K. COMPANY

Type of company for international Trade and Investment.  Private ("Ltd").

Restrictions on Trading.  Yes, for specified groups, which include banking, insurance, financial services, consumer credit and related services.

Powers of Company.  A Company incorporated in the United Kingdom has the same powers as a natural person.

Language of Legislation and Corporate Documents.  English or Welsh.

Registered Office Required.  Yes, must be maintained in the United Kingdom.

Name Restrictions.  Any name that is identical or too similar to an existing company; any name which would be considered offensive or suggests criminal activity.

Any name that suggests the patronage of the Royal Family or which implies an association with Central or Local Government of the United Kingdom

Names Requiring Consent or License.  Restricted names which usually require a license or other Government Authority include the use of the following words:- assurance, bank, benevolent, building society, Chamber of Commerce, fund management, insurance, investment fund, loans, municipal, reinsurance, savings, trust, trustees, university or their foreign language equivalents for which the approval of the Secretary of State is first required.

Language of Documentation.  Whilst the name of company can be in any language, the documentation must be in English. Any name in a language other than English must be accompanied by a certified translation to ensure that the name is not restricted. However, if the company is incorporated in Wales, documentation in Welsh will be accepted.

Disclosure of Beneficial Ownership to Authorities.  No, but disclosure may in certain circumstances be required for accounting purposes. (Accounts must be filed and are available for inspection by the public).

Authorized and Issued Share Capital.  Private Limited Companies have a minimum authorised share capital of £1 or its currency equivalent. The minimum issued capital is one share, but additional capital is usually issued to reflect the stability and strength of the company.

Classes of Shares Permitted.  The normal category of shares are ordinary shares but, subject to the circumstances of the company, they may be preference shares, deferred shares, redeemable shares and shares with or without voting rights.

Directors.  A private company must have at least one natural person as director who may be of any nationality and need not reside in the UK.

Company Secretary.  From 6th April 2008 a company secretary is optional.

Shareholders.  One.

Taxation.  Corporation tax (which includes Capital Gains Tax) is paid by UK companies based upon accounts, which are submitted to the Inland Revenue and the Registrar of Companies at the end of the company's financial year. A company is free to choose its financial year-end. Companies pay corporation tax at the rate of 20% where the net profit before tax does not exceed £300,000.

Tax rates on profits over £1,500,000 is at 23%. The main rate of Corporation Tax applies when profits (including ring fence profits) are at a rate exceeding £1,500,000, or where there is no claim to another rate, or where another rate does not apply.

Double Taxation Agreements.  The United Kingdom is party to more double tax treaties than any other sovereign state.

Financial Statements Required.  All UK companies are required to file accounts prepared in statutory form with the Registrar of Companies and the Inland Revenue whether trading or not. These accounts need to include:

- a directors' report signed by a director or the company secretary (if one is appointed)

- a balance sheet signed by a director

- a profit and loss account (or income and expenditure account if the company is not trading for profit)

- notes to the accounts

- group accounts (if appropriate)

Companies whose annual turnover does not exceed £5,600,000 may qualify for an Audit Exemption and are not required to file independently audited accounts and in such cases the directors must self-certify the accounts.

To qualify as a small company, at least two of the following conditions must be met:

- annual turnover must be £6.5 million or less;

- the balance sheet total must be £3.26 million or less;

- the average number of employees must be 50 or fewer.

To qualify for total audit exemption, a company must:

- qualify as small (see above)

- have a turnover of not more than £5.6 million; and

- have a balance sheet total of not more than £2.8 million.

Procedure to Incorporate.  Submission of Memorandum and Articles of Association, Declaration of Compliance and Statement of the First Directors and Secretary and notification of the location of the Registered Office with the requisite fee to Companies House.

Whilst every effort has been made to ensure that the details contained herein are correct and up-to-date, it does not constitute legal or other professional advice. We do not accept any responsibility, legal or otherwise, for any error omission.