Business in UK: What are the best structures?

Once decided to invest in UK, the Italian investor will need to choose on the appropriate structure to create to carry on its business.

Below I will try to list the main models to start a business activity.

Branches: When a company already established in Italy wanting to operate in the UK may set up a subsidiary, which will have the same administrative rules of British companies. A newly formed branch will have to register with Companies House.

Various documents have to be filed with the Registrar of Companies, which is  a public body , an official in charge of all deposits relating to the Companies Act 1985 to 2006 . Usually you must also deposit a standard form, filled out with some essential data, such as the names of the legal representatives of the company established in Italy with its date of establishment in Italy and of the branch in UK . The address in Uk and the name of its representative. This document has to be formally  sworn before a solicitor . the form has to be accompanied by a copy of the statute and constitution,  translated into English. Note that for debts incurred by the branch the main company is wholly liable for these, also if it is in Italy based.

Representative offices: As an alternative to the branch, it is possible to open a representative office to promote services or products in the UK, with the use of few resources and staff. A representative office, as for the branches, is subject to filing requirements with Companies House.

Limited companies: The most utilised tool of foreign investors to do business in the UK is a limited company. In this case the responsibility of its members is limited to the portion (shares) they granted in the company.  Incorporation of a company is quite fast and cheap. Again there are a number of documents that must be filed with the companies house. Further details about constitution of a company will be given in the next article on this blog .

Partnership: The partnership agreement it is made among entrepreneurs (but also self-employed) who decide to carry on a business in common for take a profit. The common law recognizes two types of partnership: – general partnership, governed by the Partnership Act 1890 and the limited partnership, governed by the Limited Partnership Act 1907 and the Partnership Act of 1890.

In the first case all the partners are liable for the debts of the company and so their personal assets can be attacked by creditors. In the second case instead there is more protection for the assets of partners who are responsible solely for the capital they invested in partnership. Conversely they cannot participate in the management of the company, which belongs only and exclusively to the general partners, who instead responsibility’ unlimited. The minimum number of partners required is of two, while there is not a maximum number of partners, that can be unlimited.

Last but not least there is the Limited liability partnerships (LLP), introduced by the LLP Act 2000. It is a form of corporate business association. It allows limited liability for business debts in general, but individual partners cannot limit their personal liability for negligence. The LLP is very common among the associations of professionals.

In addition to the above listed business forms it is possible also to consider:  Representation or agency arrangements, distribution agreements and joint ventures, but we will talk about in another article.

Anyone in the meantime was interested in focusing on these issues can contact us at the numbers detailed in the blog.

Avv. Gianluigi Cassandra

Avvocato a Manchester (Athena law Solicitors) e Salerno

European registered lawyer in Manchester (Athena Law Solicitors) and Salerno                                                   www.


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