Are British companies a dark and unconquered world for you and your business ideas? Then you’ve come to the right blog. Here’s the ultimate instruction for use, which will answer all your questions regarding business in the UK.
UK Limited Partnership
The British Limited Partnership is an effective tax tool that entrepreneurs increasingly use to trade outside the UK.
A Limited Liability Partnership (LLP) combines the advantages of corporate status and the protection of limited liability of participants, allowing you to pay taxes on activities at the rate applicable to traditional partnerships.
For the formation of the LLP structure, you need at least two participants - individuals or legal entities of any residency. The memorandum of association is submitted to the Registration Chamber of the country - Companies House. The name of the British partnership must differ from the names of companies already registered in the House and end with the words “Limited Liability Partnership” or the abbreviation “LLP”. For legal activities, the partnership must have a registered office in the UK.
Termination of membership in the LLP partnership is possible upon liquidation of the company, in the event of the death of the partner, or through the adoption of an appropriate decision by other participants in the partnership.
Partnership agreement
British corporate law does not make the creation of a written partnership agreement a prerequisite for the existence of LLP. However, to optimize the interaction of partners, such an agreement is recommended for drafting and signing by all participants.
Typically, a partnership agreement contains data such as the type of business, the amount of capital in the organization of each partner, the procedure for distributing partnership profits between participants, the responsibilities of partners.
Reporting and Auditing
Designated individuals of the British partnership are required to maintain detailed financial statements that enable authorities to determine the current financial condition of the company at any time. Reporting should be submitted to the Register of Companies no later than 9 months after the end of the period covered by the report. For failure to comply with the deadlines for reporting fines are provided.
Taxation
LLPs are “tax transparent” - the distributed profit of the partnership is taxed separately for each partner. Partner income is not taxable in the UK if it was received outside the country.
If the partner who received income from partnership activities outside the UK is a resident of tax-free jurisdiction, the tax rate on such income will be 0%.
LLP partnerships with non-UK residents are not subject to the benefits of the Double Taxation Agreements. The place where the company actually exists will be considered where effective management is located.
British International Holding Companies
In the practice of world business, British holding structures are a reliable, profitable and easy-to-use financial planning tool. Why?
- In Britain, most foreign dividends are exempt from taxes;
- Dividends paid to shareholders are not taxed;
- Income from the sale of shares in a subsidiary is not taxable in the UK;
- Profits from the sale of shares received by a non-resident shareholder in the UK are not taxed;
- Availability of Double Taxation Agreements with more than 100 countries;
- There are no liabilities for the share of equity capital;
- There are no requirements for the minimum amount of paid shares for Limited companies.
Foreign dividend tax
A British company is exempted from the obligation to pay tax on dividends. The list of conditions is variable, depending on the size of the recipient company.
Sale of shares
Shareholders of a UK company that are not UK tax residents are exempt from payment of tax on income from the sale of shares.
SID
The UK is in the top 5 countries with the largest number of Double Taxation Agreements concluded. Many of these agreements provide for a reduced tax on paid dividends or its complete absence.
Stamp duty
There is no stamp duty in the UK on personal shares paid and on issued share capital. A stamp duty of 0.5% is provided for the transfer of shares and is payable on each such transaction.
Minimum paid out capital
There are no requirements for minimum paid-up capital for international British companies.
Open Joint-Stock Companies must have a minimum authorized capital of 50,000 GBR, 25% of which must be paid.
A UK-based holding company is a profitable tax planning tool for international trading activities. The special conditions for taxation provide an additional argument in favor of registering a holding company in the UK.
