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UK Offshore Company Formation

The United Kingdom is not an offshore jurisdiction per say. The country allows for the formation of a business company called a Limited Liability Partnership which if structured the right way will be given tax concessions similar to what is similar to that received by many offshore corporations today. A UK LLP is very easy to maintain and form. A UK LLP allows for greater flexibility than an ordinary business company.

A United Kingdom Limited Liability Partnership (UK LLP) is a company structure which can be formed in Great Britain. A UK LLP can be best described as a cross between a partnership and a limited company. If a Limited Liability partnership formed in the United Kingdom is structured properly then it will be taxed as an offshore entity in the United Kingdom.

The offshore formation of a UK LLP is regulated by the United Kingdom Limited Liability Partnership Act which was passed in 2000. The actual formation or incorporation of such business entities in the United Kingdom began in 2001. In accordance with this piece of legislation a UK LLP can be formed by two (2) or more persons who can also act as subscribers to the company. A UK LLP is formed with the intention of carrying on business to realize a profit. For offshore company formation in the United Kingdom the relevant documents must be submitted to the Registrar of Companies. For offshore company registration in the United Kingdom the persons wishing to incorporate the offshore company must file the information needed in a form (LLP2 Form) which is acceptable by the Registrar of Companies. The information which is needed for the formation of a UK LLP is as follows:

  • The name of the Limited Liability partnership

  • The registered address of the LLP

  • It must be stated specifically where in the United Kingdom (Scotland, Wales or England) the LLP will be located

  • The names and addresses of the members or of the persons who will become members of the partnership

  • Specify who are the designated members of the Limited Liability Partnership (the minimum required is two (2) )

  • A signed statement by a member of the partnership or a Lawyer representing the partners stating that the partnership is being formed strictly for businesses purposes and for realizing profits

When considering the UK formation of an offshore LLP special deliberation must be made when choosing a name for the UK LLP. The phrase Limited Liability Partnership or its abbreviation LLP must be added to the name of every Limited Liability Partnership formed in the United Kingdom. The name of a UK LLP cannot be comparable with that of a LLP already formed in the UK. The name of the company can be written in any language. Company names which are not written in English must be translated and a certified copy must be submitted upon offshore corporation formation. UK LLPs with names which are considered to be offensive will not be registered.

According to the legislation which regulation the offshore formation of LLPs in the UK there are certain words which the partnerships are restricted from using as part of the company name; Trustee, Fund Management, bank, Chamber of Commerce, Building Society, Assurance, Insurance, reinsurance, Savings, Municipal, University, Trust among many others. UK LLPs wishing to carry out banking business or other forms of financial operations must apply for a license to conduct the above mentioned business operations and to include the words as part of the LLP name.

The minimum number of members need for the formation of a UK offshore LLP is two (2). A United Kingdom Limited Liability Partnership is required to have by legislation at least two (2) designated members who are appointed. The Designated members of a UK LLP have responsibilities to the partnership such as appoint an auditor, inform the office of the Registrar of Companies if changes are being made within the partnership (change of address or name), sign company documents among other task. The members of the UK LLP all have limited liability and are only responsible for the debts of the corporation to the extent of the contributions which they make to the partnership. The management of UK LLPs is left up to the member of the partnership.

When forming a UK LLP is imperative that the members of the partnership put together a Partnership Agreement. This will outline the contributions of each member of the partnership towards the corporation. The agreements also outline the correlation between the members. How the profits are to be shared and how or when the company will be dissolved. In essence the Partnership Agreements outlines the basic by- laws which will govern the daily operations and affairs of the UK LLP.

It takes about five (5) working days to complete the process of incorporating a UK LLP. Once all the information is sent it and meets the approval of the Registrar of Companies in the United Kingdom a Certificate of Incorporation which makes the Partnership a legal business structure in the UK. UK LLPs are recognized around the world and can do legal business operations in any jurisdiction around the world.

A UK LLP will not pay taxes as a corporation rather each member of the partnership will be taxed on the share of income they receive from the UK Partnership. However the members of the partnership will not pay any local United Kingdom taxes if no business is being carried out in the UK or with residents of the UK. The form of taxation levied on UK LLP is similar to that which is applied in many offshore jurisdictions around the world.

Companies formed in the United Kingdom are well known around the world respectable trading and business companies. Since the Limited Liability Partnership Act was passed in the United Kingdom many companies of this type has been incorporated. There are no limitations or discriminations as to what nationality can form a UK LLP.