Starting a business in the UK is much easier than in other countries, because it does not require the fulfilment of many complicated formalities. Apart from that the British tax and business laws are so clear that the subsequent running of the company, tax settlements and payment of contributions do not cause many difficulties for entrepreneurs. Interestingly, you don’t have to be resident in Britain to set up a business. All these factors make more and more Poles decide to open their business in such favorable conditions. It happens even now, when it is still unclear how the issue of Brexit will be finally solved.
LTD company as a form of conducting business activity in the UK
LTD company is a counterpart of the Polish limited liability company and it is considered to be the most advantageous form of running a business in Great Britain. LTD companies have legal personality and the finances of the company are separate from those of its owners, who are liable only up to the amount of the contribution made.
A British LTD company can be established even by those who are not residents or inhabitants of the UK. People from different parts of the world can register a business in Britain. Individuals or a person – the same person can act as both a director and a shareholder. Data of directors, shareholders and secretaries (the function of secretary does not have to be filled) are public and available in the public register.
Registration requires details of directors, shareholders and secretary, declared share capital, a UK company address and a name ending in Limited or LTD. The incorporation of a company requires an entry in the UK register of companies, Companies House. Some entrepreneurs outsource these activities to accounting offices which, at a further stage of their activity, deal with a complex service of LTD companies.
What are the advantages of a LTD company?
One of the advantages of running a business in a form of LTD company has already been mentioned above. It is the possibility of company registration by persons who are not residents of Great Britain.
Running a LTD company, we are not obliged to pay horrendous taxes – their amount depends mainly on the amount of gained income. Of course, every director of a LTD company as well as every person employed in Great Britain is subject to income tax, but many entrepreneurs earn enough money to be exempt from paying tax. The tax-free amount for the 2019/2020 tax year is £12,500 per annum, which means that in the current tax year a company director will only pay income tax once their income exceeds £12,500 per annum.
In the UK you will also have to pay such contributions, but if you run your business as a LTD company and your income is up to £680 per month you are not obliged to pay such contributions. If they pay themselves a small salary as directors of the company, they will avoid further costs.
LTD company and Brexit
British law is much friendlier to entrepreneurs than Polish law and it is visible at every stage of running a business in a form of LTD company. Based on the legal culture of the UK, we can expect that even after Brexit the UK will recognize the importance of small businesses for the economy, and thus will take care of entrepreneurs running a LTD company. We should also remember that the directors in LTD companies can be citizens of EU member states, but also residents of other parts of the world. Different laws apply here than those resulting from the membership in the European Union, therefore, although nothing is determined, it is expected that Brexit will slightly change the situation of LTD companies