[ESTABLISHING A BUSINESS ENTITY IN ENGLAND] 161
The UK comprises England, Wales, Scotland, and Northern Ireland. Great Britain comprises England, Wales, and Scotland. Within the UK there are three distinct legal jurisdictions, namely England and Wales (which together are one jurisdiction), Scotland and Northern Ireland. Each has its own laws, courts, and lawyers. In most commercial areas, e.g., company law and tax, the law is the same or very similar but, in some areas, such as real estate, it is very different. We are able to identify areas which need input from lawyers in Scotland or Northern Ireland and to arrange appropriate advice. Setting up a business in the UK is quite straightforward. Essentially, the legal basis for establishing an incorporated business is the Companies Act 2006 (as amended). 1. Types of business entity There are various ways for an overseas company, investor, or entrepreneur to set up a business in the UK: • by forming a private limited company (Limited) or a public limited company ( PLC ); • by establishing a branch (a so-called “UK establishment”); • by forming a partnership (limited partnership, limited liability partnership or general partnership);
are not addressed in detail by this guide), company law and other legal matters. Fladgate LLP has a wealth of experience in these matters and will be happy to give any legal and tax advice which may be required in connection with establishing a UK operation and in dealing with the necessary legal procedures. 1.1 Formation of a company This section sets out the requirements for incorporating a private limited company in England and Wales ( company ) (as the wholly owned subsidiary of a foreign company). The PLC form (mainly used for a company quoted on a stock exchange) is chosen only for a small number of companies and will not be considered further in this guide. Fladgate LLP will, however, be pleased to assist with the formation or buying of such a company, if required. Note that a foreign investor will be treated the same as a UK investor from a company law perspective. There are two ways of incorporating a company: either by forming a new company or by buying a company that has already been formed, known as a “shelf company” (although this method is less common than it used to be). Articles of association A company must have articles of association ( articles ), which represent its constitution. UK legislation provides model articles for use where a newly formed company has not drawn up its own articles. Share capital Usually, a company will have a share capital. The share capital is made up of shares that have been issued and allotted to its shareholders (also called “members”). Each share will have a nominal value. As no minimum nominal value is laid down by law it
by entering into a joint venture; or
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• by buying or acquiring an interest in a company. In addition to the above possibilities, commercial agents can be engaged, or distributors appointed. The structure chosen for establishing a business in England and Wales is likely to be influenced by taxation considerations (which
ILN Corporate Group – Establishing a Business Entity Series
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