Company Formation

Why do so many choose to incorporate their businesses in the UK as opposed to elsewhere in the European Economic Area (EEA)? It comes down to efficiency. Incorporation in countries such as Spain require lawyers, notaries, and or government officials. Anyone living anywhere may form a limited company in the UK, while other European countries such as Switzerland require citizenship and a local address. In order to encourage entrepreneurship, legislation in the UK has been written with the formation of limited companies in mind.

In addition to the logistical simplicity, in the UK all a business needs is £1 in capital in order to be established as a limited company. Other countries require significant share capital in order for business owners to incorporate, such as Germany’s €25,000 minimum.

This is not to say that the UK has a laissez-faire attitude toward company formation and operations. Limited companies must submit various forms of documentation to Companies House both at the time of incorporation and on a regular basis afterward.

Be wary of agents offering to prepare your application for impossibly low fees. The official government registration fee is £13, so agents charging £20 are unlikely to put in the time, energy, and attention to detail necessary for your company to legal complications later on. In fact, failure to maintain registers of shareholders and minutes is a criminal offense. Therefore, be cautious in selecting an agent. You could also forgo the agent and apply for company formation online, but without the help of a professional you risk omitting important documents.