What is a company? Every man is entitled to establish a company with purposes compliant with the country’s rules and regulations. A company is a separate legal entity from its cooperated owners set by corporation law, meaning the company has legal rights and requirements for ever matter and as such the company can sue and be sued. Usually a company is an acceptable means in the modern world to perform business activities. The company’s stock holders have cease of the company by possessing stock eligible to it’s profits by collecting such profits (hereby: “dividend”).
A company Inc’ is a company with limited guarantee, a situation in which there is a separation between the rights and requirements of the company and the rights and requirements of its stock holders. In other words the company’s stock holders do not bare the company’s risks, but in irregular cases when the stock holders have committed wrongful actions, they too are liable and can be sued with approval from the courtroom system. In setting up a company there are many taxation advantages , company’s tax is 25% while individual tax rates are 48%, as such a company doesn’t pay National Insurance payments for it’s profits, even dividend transferred to the stock holders from the company aren’t liable to national insurance payments, while such payments for the individual income is 16%. This is without a doubt a significant tax benefit which must be taken into consideration when considering the cooperate structure assembly.
In order to establish a company the following documents must be submitted to the company registrator:
- The company’s establishment of standards signed by the stock holder. The establishment of standards is a contract between the company and the share holders including the name of the company , the company’s goals, the company’s capital and share value, limitations and guarantees specification and other details regarding the rights and obligations the company has.
- An initial director’s statement. A director is a member in the board of the company’s managers. Every company must appoint at least one director and when applying for registering a company’s director’s statement including his ability and willingness to serve as a director in the company is required.
- A statement written by the share holders stating that all share holders a competent, this being confirmed by an appointer lawyer.
- A request to enlist the company, the request must include the company’s name, share holder’s responsibility, the company’s share capital and an authenticated signature of the share holders confirmed by a lawyer.
- Company registry form including 3 alternate names suggested to the company
- Paid pay slip for company registry fee.
The disadvantages in establishing a company are the expensive maintenance costs which include the annual fees, bookkeeping (balance and Income statement) and the audited annual financial reports. Because of this in ever activity, you should examine the profitability of establishing a company according to the business characteristics while examining the advantages and disadvantages in setting up a company. It should be noted that the answer to this is non conclusive and varies from business to business. The legal advantages and ongoing annual savings and costs should be taken into account when establishing a company.
We will be happy to assist and council in any inquiry regarding establishing a company.