LLCs are becoming increasingly popular in the UK and USA because it gives the full freedom to the shareholders of a private limited company to enjoy the profits generated while reducing their individual financial liabilities. In an LLC each shareholder is responsible for the losses incurred according to their shares; thus protecting their personal assets in case of any financial debt faced by the business.
Basic steps to be followed for LLC company incorporation are listed below as:
- Deciding on the company name and address: This should be unique and should not have any similarity with any other company name registered in the country. The address should be within UK jurisdiction.
- An agreement stating limited liability: All the shareholders within the company have limited liabilities which are decided by their total share value.
- Complete successful registration: The application for registration of a new LLC is send to the Companies House of the UK Government. A detailed document stating the name, the permanent address, the director’s name, shareholders' names, industry type with SIC code should be sent to the Government for approval. Shareholders holding more than 25% of shares in the company should be mentioned especially as they have unique voting rights in case of any financial crisis within the company. Finally, after approval, the companies would receive a “Certificate of Incorporation” consisting of formation date and unique company code. This registration process can be done online, by post or by appointing an agent.
- “Memorandum and Articles of Association”: These are certain legal documents that need to signed by the company director, shareholders and company secretary and submitted before the Companies House of the UK Government.
- Registering for Corporation Tax: The Company should get registered at HM revenue and customs and pay 19% of corporation taxes on the profits. The Company should also file its tax returns annually. Apart from Corporation Tax, Value Added and Capital Gains Tax should also be paid.
- Mandatory Annual General Meetings: Shareholders or company directors can call for an AGM by giving 14 days prior notice. A detailed account of these meetings should be recorded and maintained.
How to incorporate LLC with bank account?
In order to incorporate LLC in the UK, a UK bank account is mandatory. The time period for the opening of a bank account depends on the bank itself. Usually, it takes 2-4 weeks for the complete process after the submission of all necessary documents. Visiting the bank in person to complete all formalities can significantly fast-track the process.
To open a UK bank account the following documents are absolutely necessary:
- Passport and permanent address verification
- Submission of personal bank papers
- Incorporation documents
- The explanation for the type of products/ services the company would deal with
- Details of trading activities
- A turnover projection- monthly and annually in UK currency.
- Source of funds and wealth
- A letter stating clearly the purpose of opening a bank account
After successful verification of all the above-mentioned points, a bank account may be opened. In case of, any ambiguity in the information provided the bank has full right to decline and will process a refund of the service fees within 24 hours.
There are around 3-4 banks offering distant bank account opening services at affordable rates with a high success guarantee. Usually, the price for opening a UK company bank account is around USD 600-650.
Thus, for any domestic or offshore corporation to start a business and move the currency opening of a bank account is absolutely indispensable.