Both types of legal entities have to be registered in the Companies House and the Tax Office, allowing you to obtain VAT and EORI numbers if you plan to work in the international markets. Both types of legal entities can be incorporated in 24-48 hours, but are you aware of the key differences between them? First of all, the main difference is the distribution of shares. It's worth noting that an LLP is a partnership without shares based on the Partnership Agreement. Furthermore, while creating an LLP, the partners are not obliged to assign a director to be registered in the Companies House, while being able to choose one in order to conduct the business operations. As you probably know, the LLP stands for the Limited Liability Partnership. The name of this legal entity clearly tells us that one of the partners bears no responsibility for the second partner in case if the latter faced financial losses related to an agreement that was signed on their own. A partnership can be established as by individuals, as well as by legal entities. There have to be at least two different local or foreign parties to register a Limited Liability Partnership. One of the key advantages of the Limited Liability Partnership in comparison with the Private Limited Company (LTD) is the fact that the first one is not obliged to pay the corporate tax. Instead of that, all partners have to pay their individual taxes calculated respectively to their share in the Limited Liability Partnership.
It's worth noting that a Private Limited Company can be incorporated by a single entity. At the same time, only an individual can become a director of the Private Limited Company, while both individuals and legal entities are able to act as shareholders. The director of the company has to be registered in the Companies House, while all business operations of the company are based on the Memorandum. Furthermore, the company has to pay the corporate tax in the amount of 19% from all revenues. It's worth noting that the company is obliged to pay the corporate tax from all revenues irrespectively to the country of their origin. Any individual of at least 16 years old can become the director irrespectively to their citizenship. At the same time, a company may have several directors and shareholders.
In order to incorporate a company, one needs to submit an application form and attach a copy of the passport of the director and the service address. In the case of the LLP, one has to provide the mentioned documents for each of the partners.
One is able to choose the name of the company after checking if the chosen name is not registered in the Companies House. At the same time, there's a list of sensitive words, which can be used only by state authorities and other governmental bodies, e.g.: Royal, British, Association and so on.
In order to register a company, one needs to provide a British address. We kindly recommend you to avoid using your home address for safety reasons. It's much easier to take an address of the agent, which is going to be worth £50 annually.
One last thing: you are able to incorporate a legal entity on your own, but we really recommend you hiring an agent in order to avoid numerous mistakes and errors. By doing so, you will be able to avoid them instead of spending a lot of time to correct such issues.
In the majority of cases, you can not only save your precious time but a lot of finances by hiring a professional agent to act on your behalf.