5 Shocking Things About Company Formation in the UK |
Posted: October 29, 2021 |
The government has a lot of programs and initiatives that are aimed at helping entrepreneurs succeed in the market, but there are some surprising things about company formation in the UK you might not know! Here's what you need to be aware of when it comes to starting your business. Informative tone with five shocking or surprising aspects about company formation in the UK which will be outlined in detail within this blog post. There are many different types of business structures to choose from It's not necessary for your company name to include the word LTD or plc You can set up an online business without registering a business with Companies House You can register a limited company in one country and operate in another There are different types of business bank accounts to choose from There are many different types of business structures to choose from: You can create your company in a wide range of ways, here's what you need to consider: Limited Liability Partnership (LLP) – Designed for professionals and businesses that want liability protection and the benefits of a partnership Cooperative – A co-op doesn't have shareholders, instead each member has an equal share and is voted in by the members, who can be businesses or individuals. Community Interest Company (CIC) – Established to deliver benefits for the community and not for private gain. Charitable Incorporated Organisation (CIO) – This is another form of a not-for-profit organization and it's designed for charities. European Economic Interest Grouping (EEIG) – This structuring allows businesses to join forces without making a merger. It doesn't affect the tax liabilities of any one business, but there can be restrictions when it comes to how much you can invest. Limited Liability Partnership (LLP) – Designed for professionals and businesses that want liability protection and the benefits of a partnership: A LLP is a commercial business structure, but it shares some features with partnerships. It restricts the personal liability of members allowing them to protect their assets from the debts or claims made by the company. It also provides flexibility for the management of the business, which is helpful if you are a growing or changing organization. Cooperative – A co-op doesn't have shareholders, instead each member has an equal share and is voted in by the members, who can be businesses or individuals: Co-ops are owned by their members and are often found in the retail, purchasing, and farming sectors. This type of business is often promoted by community activists who want to create a more socially responsible business structure. Community Interest Company (CIC) – Established to deliver benefits for the community and not for private gain: Although this type of company can have shareholders, it has more restrictive conditions than a standard limited company. This business structure is only permitted to distribute its surplus funds among the community it serves, which means you can't pay dividends or give your shareholders income. The products and services offered by this type of company must also benefit the public in some way. Charitable Incorporated Organization (CIO) – This is another form of a not-for-profit organization and it's designed for charities: The main purpose of this type of business is to provide public benefit. It restricts the distribution of profits, so dividends can't be given to investors or members, which means you can only distribute any surplus funds to other organizations that are also registered as CIOs. European Economic Interest Grouping (EEIG) – This structuring allows businesses to join forces without making a merger: EEIGs are designed for companies that want to collaborate with similar organizations in different countries. Each partner company still has its own legal and tax status, and each one will be responsible for the debts and actions of its own organization. It's a popular way for businesses in the same sector to share ideas and expertise. Limited Liability Partnership (LLP) – Designed for professionals and businesses that want liability protection and the benefits of a partnership: A LLP is a commercial business structure, but it shares some features with partnerships. It restricts the personal liability of members allowing them to protect their assets from the debts or claims made by the company. It also provides flexibility for the management of the business, which is helpful if you are a growing or changing organization: The LLP differs from other types of business structures in that it doesn't offer its partners limited liability, but this type of partnership does provide tax benefits and legal protection. Conclusion: Company formation in the UK is a great opportunity for entrepreneurs and startups looking to start their businesses. The government has many programs that are aimed at helping you succeed, but there are some surprising things about company formation in the United Kingdom that you might not know! Here’s what we found out when researching this topic.
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