The advantages of the Ltd contribution management in England
From day to day there are some voices saying that we should use the belonging to EU and its possibilities. One of the recommended options of contribution management is founding a company in England.
There are many benefits like low dues for state insurances, the high tax free amount and the profitable tax system or really minimum paperwork.
The Ltd company can be conducted even if you are not residential or an inhabitant of Great Britain.
If you want to found a limited liability company (Private Limited Company – LTD) the biggest plus is surely classification of our own finances from firm’s funds(what concerns also debts) In the case of Ltd contribution there is no given minimum value of in-kind contribution.
Very often the distributors provide the amount of 1000 pounds as the initial capital which they divide for actions valued for 1 pound.
If you want to found a contribution Ltd in England you need necessarily determine until the registration the data such as the name of company(it has to end at Limited or Ltd) and its address (there are firms providing the address to the contribution for a small amount of money).
The next step is registration in Companies House. It i san institution of which the equivalent in Poland is the National Court Register.
It is important to indicate at least one director and at least 1 shareholder.
It is very important to set the agreement content about firm founding contained by shareholders (“memorandum of association”) and the details concerning shares (“statement of capital”). If you found a contribution it is necessary to describer so called articles of association (the statues of firm management) and finally you need to make a registration in order to pay the taxes (Corporation Tax).
The basic tax rates are as the following:
- 19% taxes for companies with the income not higher than GBP 300,000.00
- 19% taxes for companies higher than GBP 300,000.00.
A year ago the tax was 20%. However a few years ago the tax rates were much higher. Currently the government try to encourage firms to investing in the UK and the tax will be lowed to the rate of 17% in 2020.
If you consider of founding individual firm in England you need to get know with the article The registration of firm in England step by step.
For you registration you need only one person who is Director and Shareholder. The director is obliged to prepare year reports (annual return) which are about the firm’s status and the changes about its structure. The director is also obliged to make the year tax settlements.
It is worth to get the NIN number which will confirm the registration in the British tax and insurances system. It is worth to know that in the Great Britain there are firms coexists that will register the given company by not too big amount of money.
The Ltd firm is obliged to manage the accountancy, to present every year testimony to Companies House and to create the tax return to HMRC (HM Revenue & Customs what means the British Tax Office) The CWF1 form is needed for applying a testimony (you can apply it even by writing a list).
In summary, the foundation of firm in England is simple and fast. It is necessary to make the following steps:
- choose the name of company;
- choose the directors of contributions and make sharing of actions;
- indicate the head office firm and office(there are possible even two addresses);
- the next step is choice of the accountant(in England there is no obligation of employing an accountant);
- foundation of the bank account(the longest stage)- you need to arrange a meeting Bank Manager of chosen bank, to which you need provide the full documentation(identity cards of all directors, the confirmation of each director’s address, the documents from the day of foundation(like certificate of incorporation and shares certificate). During the interview with the bank worker we need to answer the question about our plans for the nearest years, allegedly trading. The cheapest option is running the account and operating by the Internet. The most banks have promotions and by the first year or 2 years you don’t have to pay for your bank account. The LTD firm has a duty to found a corporate account. The Sole Trader are not obliged to do so.
- Then you need to take over insurances, the most important is to get a public liability insurance(against civil liability). In the Great Britain there is also other insurance available called employers liability insurance(against civil liability for the employers). It is worth to remember about any insurances of vehicles belonging to firm.
The biggest advantage of registration the firm in the Great Britain is paying dues on social security in the moment when our earnings have a start.
The other advantage is the free tax amount valued for 11 500 pounds. It concerns the directors, the contribution don’t have to pay the dues.
In addition the costs of business management in England is incomparably lower than in Poland. For that reason it is worth to get to know with the topic and try to do it abroad cause the native democracy kills our spirit of enterprise.
I also recommend to find a good accountant who will help you in creating the LTD contributions in England. The other situation is in case of the individual firm where the registration like also management of accountancy is much easier.
Please write in comments (if you run your own contribution) why it is worth ot not worth to found a contribution in England.