Setting Up Business in the UK - Incorporation of a company

Transcript

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Hello, I'm Sarah Taylor, a lawyer at Stephens & Bolton and I welcome you to our first podcast in our series about setting up business in the UK.

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Now is an ideal time to expand your business into the UK and over the next few weeks we will be discussing how to go about this, the opportunities available and the dangers to avoid.

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We're going to start today with Lucy Barnes, who heads up our company secretarial team. Who's going to explain the process of incorporating a company in the UK and what often surprises overseas clients about that process.

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Lucy, a very warm welcome to our podcast.

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Thank you very much, Sarah. Delighted to be here.

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Tell me, what does the CoSec team do?

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Well, the first thing I should probably mention is the use of the term CoSec, because that's just the shorthand really for the longer version, which is Company Secretarial, which is a bit too long to say on a day-to-day basis. So we tend to use the word CoSec for short.

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And the way I see it really is that CoSec is divided into two halves, so there's the incorporation side of things which is essentially setting up a newco, setting up a new company in the UK for our clients.

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And then there's the ongoing company secretarial requirements, which is, as it says on the tin really, there are various regulatory requirements and compliance requirements that companies need to take care of in their annual cycle, and we support our clients to do that on an ongoing basis.

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I see, and what do clients find different about setting up business in the UK. What surprises them, or maybe even trips them up?

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I think one of the things that clients find a bit different depending perhaps on the jurisdiction is that we can actually set up a company very, very quickly indeed. So there's an option at the registrar company's house to set up a company within a day. If we if you choose that option or otherwise, it tends to take a couple of days for the certificate to come back.

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But really, the trip ups happen because there's quite a lot of data gathering to do beforehand before we can make that submission to Companies House.

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So for example, we as CoSec providers are governed by an additional layer of regulatory requirements called TCSP, which essentially means that we have to do enhanced CDD on our clients before we can incorporate a company.

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Gosh, I'm hearing a lot of acronyms in the CoSec world. Lucy, I bet that gets confusing.

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Yes it does. It does get quite confusing and there and there are more to come. So we do the advanced CDD for our clients, which essentially means getting hold of a certified copy of their passport, and a recent proof of address.

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And that could take a bit of time to organise depending on the availability, for example of the directors of the new company and talking about acronyms and the other bit that could sometimes trip up clients is the persons of significant control register the PSC register.

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Which is something that all companies are required to have in the UK, and it's quite similar to what I understand European companies have to deal with quite often, which is the concept of the ultimate beneficial owner, the UBO. But there are some differences, and so sometimes it takes a little while to work out what information should actually be showing.

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On the new companies PC register so that can hold things up a little bit, and I suppose the other thing to mention is the company name itself. So essentially a client can choose what they like for the name for their company.

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But there are a couple of restrictions so you're not allowed to use a name that is too similar to an existing name as this could potentially confuse a customer for example, and this can sometimes cause a little bit of difficulty if you've got a big group structure and we want to use similar names like that, but we can resolve that.

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And there are also some restrictions on, for example, names that might be deemed offensive, which can't be used or for example, a name that implies that the company is part of the UK government for example, when it obviously isn't, that would be prohibited as well. So we can check that beforehand and choose a name that that works for everyone.

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And then once you have that information in place, we submit the incorporated Companies House and as I say we could get it back, get the certificate of incorporation back very quickly within a day or so, which is great.

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That's interesting and I expect welcome by most clients. So, once you receive the certificate of incorporation, is the business good start trading.

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Yes, effectively the business is pretty much ready to go. We've received back the certificate of incorporation and as you as you say, it has the company name on it and it also has the company number on it.

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And we find that one of the things that clients most immediately want to go ahead and do is set up a bank account and they need the company number in order to do that.

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So the client can go ahead and set up the bank account, and they also may have early stage requirements in relation to, for example, VAT, payroll, other tax requirements.

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And so we can put our clients in touch with an accountant if they don't already have accountancy services in the UK, which can help them with these early stage requirements. So yeah, it's pretty much ready to go.

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Excellent. And are you seeing an increased demand for your services, Lucy?

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Yes, certainly. I mean since Brexit, it's much, much harder for overseas companies to do business in the UK. So in order for them to carry on and continue their sort of inward investment here, they need to set up a company to facilitate this. So yes, inevitably there has been a huge, hugely increased demand in relation to this kind work.

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And why do overseas businesses tend to incorporate a company in the UK as opposed to less formal arrangements?

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Yes, we have had enquiries from clients about setting up, for example, a branch office over here. So the main office would be in another jurisdiction and then we would set up a branch. But it seems to be much more common to set up a company.

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And I think this is probably to do with the fact that a company as an incorporated body is very credible for doing business over here. It looks credible to suppliers, to distributors, to purchasers, to other counterparties. And so, I think it's much easier for clients once they have the company to go ahead with developing the business

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I see that makes sense. And just to finish, Lucy, what do you enjoy most about your work.

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Well, we have a great team, so I thoroughly enjoy the day job and what I really like about it is that we get to meet the clients right at the very beginning of their journey through setting up a business in the UK. So often the incorporation is the very first thing that needs to be done.

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And we liaise with them closely in relation to this, including, for example, that enhanced CDD that I mentioned earlier, which means that we go on zoom calls with the client to certify their document and we can put the face to a name and that kind of thing. So it's really nice to meet the client early on in the process.

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And then we tend to be often a point of contact for the client going forward because they've dealt with us and they deal with us on an ongoing basis as we're doing the company secretarial work, the CoSec work.

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So, we often are contacted by the client looking for some other advice, perhaps, I don't know, employment advice or real estate or commercial contracts. And so we get to follow the journey with the client in this way, and it's really nice to be part of that journey with them and hopefully to a very successful business.

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Well, thank you, Lucy. That's been a fascinating insight into the process of setting up a company in the UK and a big thank you to our listeners. I hope that you have found it useful.

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If you have any comments, questions or suggestions of topics for us to cover in this series, please get in touch through our website, we'd love to hear from you.

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And do join us for our next podcast. When Jackie Penlington, Managing Associate in our immigration team, will be talking us through how you can transfer your staff to the UK or recruit from overseas. Follow the link on our website to subscribe to the series.