[ESTABLISHING A BUSINESS ENTITY IN ENGLAND] 163
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, 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, 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. The UK left the European Union ( EU ) on 31 January 2020 and the transition period ended at 11.00pm on 31 December 2020. From the end of the transition period the European Union (Withdrawal) Act 2018 ( EUWA ) created retained EU law, i.e., a new body of law based on EU law that applies in England and Wales (alongside the laws of England and Wales). Going forward, the UK can decide whether to introduce new UK policies or whether to mirror EU policies in UK law. UK law must be compatible with the terms of the withdrawal agreement, future agreements with the EU and other countries. 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);
by entering into a joint venture; or
•
• 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 are not addressed 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 public limited company 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”. Articles of association A company must have articles of association ( articles ), which represent its constitution.
ILN Corporate Group – Establishing a Business Entity Series
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