The Great Britain (PLC, LTD, LLP)

The Great Britain (PLC, LTD, LLP)

The Great Britain is not tax-free jurisdiction. Any profit received in the territory of the Great Britain is taxable regardless the place of residence or formal residence of a person or state of an entity. However, if the company complies with certain conditions, certain tax benefits may be granted.

The most popular types of companies that are registered in the Great Britain are Private Limited Company (LTD) and Limited Liability Partnership (LLP). 

Companies like Private Limited Company (LTD) are subject to certain requirements, and owners of companies while observing these requirements may do effective business not being fined by tax authorities.

In most cases ordinary shares are used, but under some circumstances the use of privileged shares, deferred shares, redeemable shares as well as voting and non-voting shares is allowed.

All companies in the Great Britain have to report in the form established by the Companies Register and Inland Revenue. The reporting shall include the following information:

• Report of directors of the company signed by the director or company's secretary;
• Balance-sheet signed by director;
• Loss and Profit Statement;
• Notes to reporting;
• Consolidated reports (if required).

Those companies where annual turnover does not exceeds 5,600,000 GB Pounds are exempted from submission of audit reports and from the must to perform independent audit. In this case, director personally certifies the reporting.

Under the laws of the Great Britain, companies like LTD need annually prepare and submit the following reports:

1.            Annual returns – information on managerial structure of the company (managing directors, partners), as well as on registered office of the company. This information is submitted once a year.

2.            Annual Accounts – report on financial activity of the company for a year. Financial statements should be submitted within 10 months after a year of company's existence. If a company does not perform any trading activities, then it should submit so-called Dormant Accounts.

3.            Tax Declaration is submitted by the companies performing trading activities.

General Table of Requirements to the Companies Like Private Limited Company (LTD)

Parameters	Requirements to the companies of Ltd type
Ending of the Company Name	Limited, Ltd.
Applicable Law	The Companies Act, dated 2006 as amended
Tax Rate of the Company	Basic rate – 28% (reduced rates of 20-21% are also provided)
Standard Currency	GBP
Standard Charter Capital	GBP 1,000 (is not required to be paid)
Minimum Number of Directors	1 (may be a legal entity)
Minimum Number of Shareholders	1 (may be a legal entity)
Residence Requirements	No. However, it is preferable if director is a resident of the Great Britain.
Nominal shareholders and directors	Allowed
Company's Secretary	Required
Shares to Bearer	Not allowed
Confidentiality	In case of nominal service only. Open register of shareholders and directors in the country.
Public Information	Articles of Association and Charter of the company, directors, shareholders, registered office, financial statements, company's secretary
Annual tax return submission	Required
(Annual Tax Return)
Audit	Required if company is engaged in trading activities

Limited Liability Partnership (LLP) is a partnership established by a union of participants and having the legal status to perform any activities, which can be performed by an individual, – company may enter into agreements and contracts, be engaged in trading, real estate development business and investing activity, own immovable property, enter into financial agreements and ensure safety of its assets.

LLP is LLP is a relatively new entity in the UK - it was established by the Law "On Limited Liability Partnerships» (Limited Liability Partnerships Act 2000) in April 2001.

Most of the existing laws that define the conditions of registration and operation of the LLP are based on the 'Regulation on Limited Liability Partnerships', dated 2001 (Limited Liability Partnerships Regulations 2001 (SI 2001/1090).

LLP are becoming an increasingly popular type of companies that are registered in England. Creation of LLP is an attractive instrument for professional firms and businesses including start-ups and joint ventures.

Taxation of a Limited Liability Partnership (LLP)

The legislation allows creating LLP with zero taxation rate, since partnership is not an individual subject of taxation and is not obliged to obtain taxpayer number in the Great Britain. But it still has to submit account reports.

Taxes on income received by an LLP shall be paid by founders directly at the place of residence. Thus, each partner-participant of an LLP gets under the favourable tax conditions, under which the taxation rate will be lower than the tax rate as in case of independent business.

In order an LLP to have zero rate of corporate taxation, the following conditions shall be met:

• LLP should have at least 2 founders (partners);
• The partners shall not be residents of the Great Britain;
• LLP's company shall not operate in the territory of the Great Britain;
• LLP's activities shall be connected with trade of professional services.

In this case, the tax is not collected from the LLP's company, but from partners-founders of the LLP ('Designated Members'). In this case, the partners-founders of the LLP may be two other companies registered in tax-free jurisdictions (e.g.,  offshore in Seychelles and and offshore in the BVI), which results in clear benefits.

General Table of Requirements to a Limited Liability Partnership (LLP)

Parameters	Requirements to the companies of LLP type
Form of Incorporation	Limited Liability Partnership (LLP)
Applicable Law	Limited О Liability Partnerships Act 2000
Directors	No
Founders	Founders of the company are Designated Members
Founders, minimum   Two
Requirements to Founders	Legal entities/Individuals; residents/non-residents of the Great Britain
Charter Capital	No requirements to the minimum amount of the Charter capital
Permitted Activities Permitted Activities	Trading, Professional services
Account Reports Submission	Required. Persons responsible for submission of reporting are Designated Members
Annual report	Required. Contains information on participants, and in case of income of over 200,000 GB Pounds - income amount as well, which is distributed in favour of a participant with the larger participatory share.
Audit Report	Required. Exception: if the company is small; turnover is less than 5.6 mln GB Pounds; total amount of assets is less than 2.8 mln GB Pounds.

The Most Popular Forms of Incorporation in the Great Britain are: 

• Public company (Plc)
• Branch of a Foreign Company.

Main Features of a Public Company (PLC): 

• minimum charter capital for Plc is 50,000 GV Pounds;
• at least 25% of the charter capital must be paid;
• two directors minimum and company's secretary
• Financial statements shall be subject to audit if the turnover is more than 1 mln GB Pounds

Main Features of a Branch:

• foreign parent company is fully liable for its Dutch branch;
• Branch shall be registered in the Companies House
• Reports of a parent company shall be submitted annually

Please note that this information may be changed from time to time and shall be re-checked by experts of the relevant jurisdiction. To obtain updated information and information on the cost of registration, please contact our representatives.