[ESTABLISHING A BUSINESS ENTITY IN ENGLAND] 166
If agreed in the agency contract, an indemnity is payable: if nothing is agreed in the agency contract, compensation is payable based on the notional value of the agency at the date of the termination. Fladgate LLP is one of the leading law firms in the area of commercial agency law and advises and represents both agents and principals. 1.6 Joint ventures A foreign company may also form a joint venture with a UK or another foreign corporation or an individual. Most commonly, the vehicle used will be a company, but it may simply be a contractual joint venture. 1.7 Buying or acquiring an interest in a company (M&A) As an alternative to forming a new company, the foreign business may buy an established company or purchase shares in it. This is certainly the quickest way of gaining a business foothold in the UK. M&A is an entire topic in itself, on which Fladgate LLP can advise if required (we have a top-ranked M&A practice). 2. Maintenance and reporting 2.1 Company Public filing requirements The company will be subject to English company law relating to the filing of information with the Registrar of Companies at Companies House. This information will be available for public inspection. Failure to comply with these requirements is a criminal and/or civil offence. Annual accounts and reports The company must keep proper accounting records which are sufficient to show and explain its transactions, to disclose with
reasonable accuracy the company’s current financial position and to enable the directors to ensure that the balance sheet and profit and loss account comply with the statutory requirements. The accounts must be prepared in accordance with a detailed format and contents specified by the Companies Act 2006. In general, all accounts filed with the Registrar of Companies must be audited, although there are exemptions available to small companies. Auditors Auditors to a company must be UK-qualified or have UK-recognised overseas qualifications. A company is entirely exempt from the audit requirement if it qualifies as a “small company”, i.e., at least two of the following conditions must be met: • annual turnover must be £10,200,000 or less; • the balance sheet total must be £5,100,000 or less; or • the average numbers of employees must be 50 or fewer, and the company must not be excluded from the “small companies’ regime”. Registers In addition to the filing of the information with the Registrar of Companies, English company law requires a company itself to maintain a number of registers, such as a register of members (or shareholders), register of directors etc. Further both companies and limited liability partnerships are also required to keep a register of people with significant control ( PSC Register ), recording details of anyone who has significant control over the company.
ILN Corporate Group – Establishing a Business Entity Series
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