Beginning and working a business can be simple in the United Kingdom
Then again, the smallest missteps can complicate the whole process. Individuals wishing to establish firms are regularly uninformed of the methods and wind up committing errors that are highly consequential. For instance, some create an organisation limited by shares when they really needed to create on limited by guarantee; others may issue all shares of the organisation in the starting stage itself when they can actually offer just a couple. To keep away from such mix-ups that are monotonous and too difficult to undo, you can decide to employ the services of company formation agents.
The real procedure of registering an organisation can be finished within a period of 3 hours after the submission of application. Be that as it may, there are a few stages involved in this:
- Selecting a name for the company – The intended name of the organisation can be looked up via the internet to determine availability. Individuals purchasing an existing organisation can likewise change the name of the obtained organisation to the fancied name if available.
- Registered office – All business within the UK are expected to own a registered office address where all notices from Companies House, HMRC and other document pertaining to the company can be delivered to. This doesn’t need to be your physical address where you work, but it is publically available so a virtual address is often preferred.
Immediately you submit your application online, and make the necessary payment through a safe framework, a receipt is created and affirmation sent. The points of interest of the new organisation created are sent via email and duplicates of reports, for example, Certificate of Incorporation, Certificate of Non-trading, Articles and Memorandum of Association and Minutes of the initially meeting held will be sent via a top post.
- Bank Account – It is compulsory that a bank account be opened for all transactions.
- Insurance and Tax registration – every business is mandate to register for national insurance, VAT and corporation tax as well as pay the taxes as at when due.
Finance and accounts – All organizations in the United Kingdom are to keep up appropriate record books and document annual returns to Companies House within a predetermined period, upon a fault at this, a punishment must be paid. It is advisable to hire an accountant to oversee all these paperwork. If you can’t afford it, financial service firms can do it for you.
- Staff – Employing the right employee is critical to implement the planned exercises proficiently and precisely.
- Website – If the organisation has a site, then all points of interest, for example, organisation number, official office location, contact information like, email, phone number etc must be shown.
What is a holding company?
This is a kind of business that particularly has to do with investments, resources and administration, as opposed to offering goods and services with a perspective to gain profits from production and sales. A holding organisation will be restricted by shares and its fundamental exercises will include owning resources in another organization (or numerous organisations) for example, real property, intellectual property and shares. Beside these capacities, a holding organisation has no other kind of business activity.
Subsidiaries refer to other firms in which resources are held. In the United Kingdom, the company where over 50 percent of assets are held is called the ‘parent’ of these subsidiaries.
The legal requirements of a holding company
So as to become a holding company, the Companies Act 2006 (sec. 1159) noted that an organization will be viewed as the subsidiary of a holding organization in these circumstances:
- More than half of the voting rights in the subsidiary.
- The directors of the subsidiary can be removed or replaced by parent company.
- In agreement with the shareholders, the parent company is a member of the subsidiary and it controls a greater part of the voting rights in the subsidiary.
Tax liabilities of a holding company
A major attraction of this sort of organization is the potential for saving taxes – majority of the dividends and share disposals are free from taxation. On the off chance that a holding organization claims a ‘significant shareholding’ of no less than 10 percent of the ordinary shares in a subsidiary for twelve successive months amid a two-year period before the transfer, the holding organization can discard these shares without any tax obligation, however, it is mandatory that such holding company and its subsidiary be active for 12 months before and after the disposal.
A holding company may also be free from tax obligations if it majorly carries out functions such as:
- Disposing of shareholdings in subsidiaries.
- Defending itself and its subsidiaries from takeovers.
- Receiving dividend payments from these shareholdings.
- The acquisition of shares in subsidiaries.
HMRC doesn’t see these activities as ‘taxable ‘; along these lines, any holding organization that works with these fundamental capacities alone won’t be required to pay for VAT. It is impractical for this kind of holding organisation to intentionally enlist for VAT; on the other hand, if the holding company gives, or means to give, taxable supplies to a subsidiary, it will be allowed to deliberately enrol for VAT. Necessary VAT enrolment will apply if the yearly taxable income surpasses £82,000 (2015-16).
Can I use the word ‘holding’ in a company name?
Modifications were done on January 31st 2015 to the guidelines for business and company names. The word “holding(s)” is no more thought to be ‘sensitive’; as a result, you may use this word to register an organisation name.
How do I register a holding company?
A holding company can be set up in the very same manner as some other privately owned business limited by shares – you should legitimately join it with Companies House and stick to strict statutory recording prerequisites. Your Company Formations provides a variety of formation bundles online for enlisting an organisation limited by shares in only three hours. To register another organization on the web, you will need to give the accompanying data:
- Name of Company
- Official office address
- Details of at least one director
- Details of at least one shareholder
- Articles and Memorandum of association
- Share capital – details of issued shares
- Documents to support the use of certain sensitive words in the company name
You would electronically submit your application form to the Companies House. If everything is properly done, your new organisation will be enlisted in just 3 hours and a confirmation will be sent to you via email along with digital documents to affirm the incorporation of your company.