As a non-resident, forming a company in the UK is a great idea considering the favourable business environment of the United Kingdom and also the stable economy. Although forming a company in a foreign environment might seem very stressful especially because the United Kingdom has a very strict government regulation. But you will be surprised to learn that forming a company in the United Kingdom as a foreigner is not that much different from that of a citizen of the country.

Although they are very similar, some documents are very important as well as some considerations to make as a foreigner forming a company in the UK. There is also some added information you need to take very important to make sure your company formation process goes smoothly. If you do not have your documents and all necessary information in place, this might cause a delay in your formation or it might be rejected by the Companies House.

Can Non-Residents Form a UK Company

Yes, of course. A non-resident can form a UK Company and you can do so from any part of the world. The UK government allows individuals from all over the world to create and register their companies in the UK making the business environment a robust location for other businesses who want to go into a bigger market.

Although there are no strict requirements by the government for non-residents who want to form a company in the UK, there are also certain criteria you must meet when providing your information for company registration. There are also some considerations you need to put in place when you're planning to create a UK Company as a non-resident. The following are some criteria a company must meet to be able to register in the UK.

• The directors must be 16 years and above
• The company must have at least one shareholder
• At least one director should be a UK resident(although this is not a legal requirement, it will help to simplify processes in the case of opening a business account)
• The company's registered office address must be located in the UK.

Aside from these special criteria, all other processes are the same as a resident when forming your company in the UK. You also have to undergo a thorough identity check by the Companies House before you can form your company.

Steps in Forming a UK Company as a Non-Resident

The following are the simple steps necessary in forming a UK-based company as a non-resident whether you base or do not base in the UK.

1. Identity Check

As a non-resident, you must provide complete proof of identification before you can form a UK company. You will be required to provide your personal information like your full name which appears on your legal documents, your date of birth as present in all your legal documents, nationality, service address and proof of your ID which can be a passport or a national ID card for yourself and all your directors, shareholders and Persons with Significant Control (PSC).

Aside a proof of ID, you must also provide a proof of address when forming a company in the UK as a non resident. A proof of address is any document legally accepted by the UK government to show the residential address of the non resident individual. Without a proof of address, a non resident cannot be able to create a UK company. As a director of your company, your residential address will be present there and the proof of address will serve as a proof of your foreign international address.

You are also mandated to provide the complete details of your business such as your business name, your registered office address which must be in the UK, the nature of your business (which follows the SIC codes) and also the share and capital structure you want your business to operate on. Also, you must provide your home address and this applies especially when you want to ao8ny yourself as a director, shareholder or a PSC of your company.

Identity check is the basis for starting the company formation process as a non-resident in the UK. You must make sure all information is correct and up to date and you must also make sure there is no complicating factor in your information provided. All information in your official document must match all information you provide to companies House when creating your company. If there is an error in your information or wrong information, your application may be delayed and eventually rejected by Companies House making the first process a whole waste of time.

Once you are done with your identity check which is one of the most important processes and the fundamental process for a foreigner forming a UK-based company, all your information is correct and up to date with no errors and no implicating parts. You can now proceed with the normal company formation processes. Although these processes are not necessarily followed in the same manner all the processes must be done before you can successfully create your company. Now we will talk about these processes.

2. Company Name

One of the important pillars of a company is the company name. A company name is the first thing clients, customers, investors and other persons come across from a company. It can attract or push clients or investors away. For this, you should be careful when picking a company name. Your company name serves as your company's legal identity to clients and even to be government. This is the name that will appear on all official paperwork of your company including tax returns, company formation certificates and other documents such as invoices and bank statements if any.

Although not mandatory, a company name should at least carry a clue about the type of activities the company is involved in. This is meant to give people who come in contact with the name for the first time a basic view of what the company does. The Companies House, which is the organization in charge of company formation in the UK, has put together a set of rules to govern the choice of names by companies. This rule helps to guide new company owners into choosing the right and acceptable name for their business. Below are the company naming rules set by Companies House:

A company must not possess the same or in any way similar name to that of another previous company. The name you choose must be different from every other company name that has been registered with Companies House. For example, if a company already uses the name Signal Ltd, another company cannot use Signalz or Signals because it looks and sounds too similar to the first. This is to prevent mistakes of company identity. A feature is available on my Companies House website where you can check the availability of names.

A company's name must not sound, look or be offensive or sensitive. For offensive, you must not use a name that is offensive when translated into another language or why the form of vulgar words or words that support racism or any other criminal offence in any form. Also, sensitive names cannot be accepted as one of your company names. Sensitive names like 'assurance' or co-operative cannot be used by a company except with appropriate authorization by the Companies House.

A company must not use another company or organization's registered trademark as their company's name. A trademark is a name, symbol or phrase that has been registered and legally owned by a particular organization or company. Using an existing trademark will attract legal punishments from the company and it might not be accepted by Companies House.

The last of the rules available to companies from Companies House is one of the most important of all rules and if a company does not include this rule even if all others are abided by, the name will be rejected by Companies House. This rule includes the mandatory inclusion of the word Limited or Ltd at the end of your company if you are forming a private company.

Following these rules is essential to make your company formation process faster and easier, once any of these rules are not followed, the company application might be rejected which is a hectic one because you would have to start your company formation process from the start.

Once you are done sitting out your company name, you can also choose to register and start using an official trade name for your company. A trade name is a unique business name mainly used by an organization or company for trading activities and is known by all clients a business dies transactions with. A company's trade name can be different from the actual company name or they can choose to use their company name as their trade name.

Once you register a trading name, other companies or organizations cannot use the same name, but if your trade name or trademark is not registered, a company will be able to use it and if they register the name before your company, they will be able to take legal actions against you. Because of scenarios like this, it is advisable to always register your trademark immediately after you start using them except your trademark is the same as your company's name, in this case, you do not necessarily have to register it because no other company will be able to register their company name or trademark with that particular name.

There are also rules in trademarking a business which is similar to that of naming a company. You cannot use the same name as any other registered company name or trademark in the UK, your trademark must be registered in the same manner you register your company name and as long as your trademark is still registered, it must appear alongside your company name on all official documents of your company or those related to your company.

You can choose to register a trademark years after registering your company as long as the trade name is still available and has not been used by any other company. If you are considering exploring other industries in the future, you should be careful when picking your trademark so it does not reflect only one industry among your other business activities.

Registered Company Address

Registering an official company address is mandatory and must be filed alongside company registration information to the Companies House during the formation process. As a non-resident who wants to form a company in the UK, you still always consider that your registered office address must be in the UK. A registered office address is the official location or address where all formal documents and formal visits by Companies House and other government agencies can come for issues relating to your business. A company formation registration document without a registered office address or an address outside the UK will be rejected by Companies House.

If your company has a physical space, using this address as your registered address is the most suitable option you can pick as a new company. You can also choose to use your residential address, especially for entrepreneurs who are just starting and running their business right from the comfort of their homes. This is also a preferred option since all legal documents will be sent to your home by Companies House and other official organizations.

It is important to note that if you use your residential address as your registered office address, it is open to public view. In the case where you are not comfortable sharing your residential address with the public, you can explore other available options such as using an accountant office, or agent offices, or you can also explore third parties who specialize in providing registered office address services for business owners who are not comfortable using their home address as their official company address.

Third parties offer their space for companies to use as a registered address and receive nails or other official documents from Companies House or other official bodies for a specific fee. If you do not find this good, you can try it out using your office or the office of any director of the company as the registered office address.

One very important consideration to make when registering your company's address is the jurisdiction of registration. Although any company registered under Companies House must have their address in the UK, it is also important to take note that this does not mean anywhere at all in the UK. Every company's registered office address must be located in the jurisdiction where it was registered.

If you registered your company in England and Wales, then your office address must be located in England and Wales. If you do not follow this rule, your application might be rejected because of your office address. This helps to ensure that your company is under the relevant authorities and there is easier communication between the authorities and your company.

It is also important to take note that you cannot use a P.O. Box as a registered address, except the detailed address of that P.O. Box is provided to ensure that there is a physical location where all letters, invoices and other documents of the company can be sent to by the relevant authorities.

Company Director(s)

As mandated by Companies House, a company must provide at least one director. A director is a superior executive of a company, with whom the responsibility for managing and operating the business lies. A director must ensure that the business follows every law of the Companies House and other official bodies and also ensure that the company performs all its obligatory activities. A company must have a minimum of at least one director to be able to pass through the incorporation process and no maximum number of directors.

A director of a company can be any sex as long as the individual is 16 years and above, a director can be an individual, a corporate body or even another company. In a case where a company is to be elected as a director for another company, there is a mandatory law that at least one of the directors must be an individual. Having an individual director ensures that there is an individual who is responsible for the accountability of all the company's actions and transactions.

If in case the company wants to appoint only one director, it must be an individual. For small companies or entrepreneurs who are just starting out, there are more common scenarios of the business owners appointing themselves as the only director of the company and most times as the only shareholder of the company. In this case, every decision is made by the director who is also the sole owner of the company and the operation and management of the company are the responsibility of that individual.

When incorporating a company, you must appoint directors and all information about each of these directors must be submitted to Companies House. This information will include their personal information and other information like whether they are shareholders of the company or Persons with Significant Control (PSC). Information of directors submitted to Companies House during company formation includes:

• Full legal name
• Nationality
• Date of Birth
• Residential Address
• Proof of address and
• Prove of ID

This information is needed to verify the identity of the directors and to also ensure that they can take full responsibility for the company's actions in the case of accountability.

As a director, you have the right to request for privacy of the information you offer to Companies House. As long as you feel uncomfortable sharing your details, especially your residential address, are ways you can protect your privacy. You can explore using the option of a service address. A service address is an address where any official documents and letters from Companies House or other official organizations will be received on behalf of the owner.

A company can also make use of a service address in cases where they don't have a registered office address available. All documents for the company will be delivered to that location. A director can also choose to use the company's registered address as their residential address as this is a more feasible option. The directors can choose to provide a residential address and make it private but disclose their service address or they can choose to submit only their service address so they can keep their address private even from Company officials.

Previously, during company formation, it was mandatory to appoint at least one company secretary who is responsible for overseeing the administration of the company and also deals with compliance with rules. This was later removed as one of the mandatory criteria for forming a company. Although you can choose to appoint a company secretary during incorporation, it is not mandatory to provide a company secretary and you can form a company without one.

Obligatory Duties of a Director

According to the Companies Act of 2006, which is a group of laws governing the operations of companies in the UK, there are seven duties of a director of a company.

1. The company must be run according to the rules and regulations set out in the company's memorandum and articles of association.
2. A director must always act in the best interest of the company no matter the situation. Putting the company's needs and goals ahead of personal interest while making decisions that concern the company.
3. As a director, you are to perform your obligatory duties to the best of your ability.
4. As a director, you must try in every way possible to avoid conflict of interest as this might influence decision-making in the company
5. A director must reject gifts or other benefits from third parties which could influence their decision-making about the company.
6. Any instance where you are receiving benefits from the company's transactions or actions, must be disclosed to the company and other directors.
7. A director is supposed to act professionally with honesty and integrity at all times.

As a director of a UK-based company, you must follow all these rules and also make sure you ensure the proper running and management of the company either by other executives of the company such as secretaries and other employees or in the case where there is a single director, you must make sure you overseer e operations of employees to ensure the smooth running of the company.

Memorandum and Articles of Association

The Articles of Association of companies is regarded as a group of rules and regulations set to govern the operation and management of a company. The Articles of Association is a mandatory regulatory document provided by companies to Companies House during company formation. It contains rules on every managerial aspect of the company including the day-to-day running of the company, disbursement of power and shares and also the responsibilities of every official of the company both in the management of the company and also in decision making.

The memorandum of Association, on the other hand, is no longer a mandatory document. It is a document containing all the aims of the company, information about the business including business activities and industries and it also concerns personal details about every shareholder of the company as at incorporation. It contains a statement from every shareholder agreeing to form the company with its name and registered office address.

The memorandum of Association also includes every shareholder in the company, outlining their share structures and their power in decision making of the company. The document used to be filed alone like the articles of association,but in recent times, it has been incorporated in the company registration form so the need to file this as a separate document has been excluded. Once you have successfully filed all information about the shareholders of the company alongside their share structures, you can tick to confirm that you have provided your memorandum of association.

Companies House has a standard articles of association, which serves as a template for companies to create theirs. Some companies usually use the government's articles of association and add a few more rules and information, while others will choose to create entirely different articles of association for their company. When creating your articles of association, it is important to create them according to the structure of your company and also by specific rules that must be kept by the company and all of its members and executives. This is due to the fact that any member of the company who does not follow the rules outlined in the articles of association will face legal sanctions.

You just note that as a new company, if you want to create your own articles of association and not use the government-provided template, you must have to file your company registration form by post. The form (Form IN01) is the form that all the information of the company alongside its directors and shareholders must be filed on and sent to Companies House by post. However, if you choose to use the articles of association provided by Companies House, you can file your company registration online.

Share Structures

A share is defined as the smaller units to which ownership and power of a company is distributed. The number and amount of shares and individual owns determine how much power and say that individual has in the decision-making of the company and also the day-to-day activities of a company and also it determines how much profits this individual is entitled to from the company and how much liability they will take when the company runs into difficulties.

A dividend is defined as the profits received by shareholders of a company which is according to their percentage of shares or ownership of the company. The higher percentage of shares an individual owns in a company, the higher dividend they receive and also the higher voting power and decision-making power the individual has in the company.

Before incorporating a company, share structures should be discussed and distributed accordingly to shareholders of the company. Entrepreneurs or small business owners usually go for the easiest and most realistic share structure which is a one shareholder share structure. In this case, one person owns 100% of the shares of the company and so, all power and decision making rights are entitled to that one person in the company. The shareholder, which in most cases, is the owner of the company, makes decisions and runs the company.

Some entrepreneurs who are just starting, sometimes give out shares to their business partners, families, friends or spouses. When a company has more than one shareholder, every profit in the company will be divided according to the number and percentage of shares owned by each individual in the company. If the company has four shareholders, with each shareholder having the same percentage of shares, then in the case where a £20,000 dividend is obtained, every shareholder will have £5,000 in dividend.

For entrepreneurs who want to save some tax, they can decide to give out shares to their partners or spouses. In cases where the other spouse pays less tax compared to the other, this can be an advantage since a part of the dividend will be taxed lower than the other. But in this case, the other spouse just owns a normal share in the company which gives them as much right as the owner of the company when it comes to decision-making and running of the company.

As someone starting a company, you can also create different classes of shares in your company which come with varying benefits. Ordinary shares are shares that offer shareholders both entitlement to dividends and also right to vote in the decision making process of the company. You can also alongside the ordinary shares, create preference shares which only give shareholders the entitlement to dividends excluding the right to vote and participate in the company's decision-making process. These types of shares are good for investors who are only interested in the dividends the company has to offer rather than the decision-making process of the company.

There are also options for management shares which are given to major decision-makers of the company even if they do not own a high amount of shares. These types of shares are good for business consultants and other individuals experienced in decision-making. This share gives them equal decision-making rights with those that have ordinary shares.

Before choosing a company share structure as a new company, it is important to consult a business advisor. Using share structures that fit your type of business and industry is very important for the welfare of the company. A business consultant can help your company structure her shares in a way that can save tax and also benefit the company.

As a company, you can choose to have one type of shares or you can choose to have multiples all depending on the shareholders and their roles in the company. You can also choose to have one shareholder or multiple shareholders and this depends on the CEO of the company and also the size of the company. Most small companies usually have one or small numbers of shareholders while larger companies usually have a higher number of shareholders.

Giving out shares also depends on whether the CEO has all the capital necessary to start up the business from scratch. If as a business owner, you do not have all the necessary capital to start up your business, you can choose to meet with investors and offer them shares in your company but this also means shares profits according to their percentage contribution to your company.

After concluding the type of share structure your company is operating on, you can then file the names of the shareholders in your company registration form. You must note that only shareholders who actively have shares at the time of incorporation will have their names filed on the company registration form. Others will have their name filed in the annual confirmation statement sent by the company to Companies House. Once shares are sold to a new shareholder, their name should be included as a new shareholder in the next confirmation statement alongside the up-to-date details of the previous shareholders.

SIC Codes

During company registration, you will be asked to provide SIC Codes for your company. The SIC codes ( Standard Industrial Classification Codes) are a form of categorizing businesses by their business activities and industries. A company can be assigned one or more SIC Codes which all depend on the business activities of the company and the industry.

Industries have different SIC codes and when incorporating a company, it is important to do research so as to choose the right SIC code. In rare cases, where the company operates in more rather than one industry, the company is allowed to choose up to four SIC codes as long as it can be related to one or more of the activities of the company. A company cannot use an SIC code of an industry they want to try out in the future, it must be activities recorded during incorporation.

Below are some of the commonly used SIC codes and their meaning and industries.

• 62012: This code is used by companies who are into business and domestic software development. It can be used by startups, large companies and even individuals who wish to register themselves as a company.
• 62020: This code is used by companies who offer consultancy services for other businesses in aspects of technology-related issues.
• 62030: This code is used by companies who manage and operate computer softwares on behalf of other companies.
• 62090: This is a more general code used by companies that are into information and technology related activities.
• 63110: This code is used by companies that specialize in hosting data and other related activities.

The SIC code is found in section J of the Companies House Act and is important to check out all the codes and find out which explains your company's activities better before using them. In the case where your company goes into a new industry, you can always choose to add or remove a certain SIC code from your company's information at Companies House. You can change your company's SIC code by filing it on your annual confirmation statement sent to Companies House.

Bank Account

A company bank account helps to manage funds separately from that of personal income which improves accountability. For small business owners such as sole entrepreneurs, having a business account is not mandatory although it is essential for keeping finances separate making it easier to keep track of income and expenses of the company.

Having a bank account as a business also enhances the overall credibility of the company to both investors and clients. Most investors would not want to send funds for shares or other means of support to a personal account but to a business and legal account. Having a bank account also improves bookkeeping processes since all transactions of the company can be easily documented and errors in transactions can be easily spotted. When a company, especially startups, wants to work with funding organizations or government organizations, they must provide a bank account for funding.

Before opening a business bank account, you should research their reviews, mode of transactions, income limit, transfer limit and also account limit. This will help you in comparing the financial goals of your company to that offered by the bank and then decide if the bank is fit for your company's transactions. Some banks that deal with only large companies, have a limited amount of money that can be deposited in the account and less might not be accepted. As a startup, it is essential to not work with these banks unless you are sure you can meet these financial expectations.

To open a bank account, you first have to do your research, submit necessary information needed by the bank and then wait for a period of time to get your account number and other necessary information regarding your bank account.

Unique Taxpayers Reference (UTR)

A UTR is a unique identification number assigned to companies by HMRC and will be used for all tax-related activities performed by the company. A company only has one UTR. You will also need your UTR to register for corporate tax. To register for corporate tax;

• First, you must create a Government Gateway account which is an account that will be used to manage all tax related activities of the company.
• Once you register your company with HMRC, you should receive your UTR in the next two weeks.
• Your UTR will be used to register your business for corporate tax in your Government Gateway account.
• Your UTR will be used to file all taxes if your company and also file tax returns.

Pay As You Earn(PAYE)

If you are planning on having employees, it is important to register your employees with PAYE which will help you in managing your employees' salaries and also their taxes. It helps to easily manage employees' payroll.

VAT

As a startup company, you do not necessarily have to register for VAT except your company's annual income of £85,000 which is the threshold for VAT. However, if you are expecting that your annual company income will be up to that, then you can register for VAT alongside company registration. It is important to watch your company's income closely if you have not registered for VAT.

Conclusion

Although registering a company in the UK might sound like a stressful process, it is easy as long as all information is up-to-date and correct. You have to thoroughly check your personal information and price of ID, check that of your directors and  that of your shareholders. It is also important to outline duties and obligations of every director or member of the company in the articles of association which serves as the constitution of every company registered in the UK.