Estonian Chamber of Commerce Seminar Richard Franklin, Eversheds LLP 23 October 2014 Setting up a UK Company

What type of entity? Branch Company Limited By Shares Company Limited by Guarantee Public Limited Company (PLC) Limited Liability Partnership (Not a Company)

Process Very simple to set up –England and Wales different to Scotland Capital Requirements Articles of Association/Bye laws Companies House Forms

Legal Requirements Minimum of one director (PLC must have two) –must have a least one “natural person” as director One shareholder (Corporate or Individual) Company secretary (not required, save for a PLC) Annual return Accounts (audited)

Set up Costs Capital Requirements –Limited Liability Company - nominal amount –PLC GBP50,000 € Incorporation Fees Legal Fees Consider inward investment grants

Timing Generally - 5 days to incorporate Same day incorporation is possible in most cases –Increased fee – but still nominal –Subject to having all the necessary paperwork prepared and in original form

Liabilities Limited to the amount of capital injected –unless agreed otherwise Security (more later) Director’s Duties 7 duties/responsibilities

Security Legal Mortgage Debenture Personal or Parent Company Guarantee –(careful as increases liability exposure)

Directors Duties 1.Act within Powers 2.Promote the Success of the Company 3.Exercise Independent Judgment 4.Exercise Reasonable Care, Skill and Diligence 5.Accept Benefit from Third Parties 6.Avoid Conflicts of Interest 7.Declare Interests in Proposed Transaction

Tax Corporation Tax – general position –profit of GBP£300,000 (and below) = 20% –profit above GBP£300,000 = 21% Please see specific tax advice as rates change and relief's may be available

Some Practicalities Banking –Consider sources of funding equity, loan, bank, bridge finance, venture capital –If taking third party debt, likely restriction on distributions whilst debt outstanding –Security

Practicalities (Cont…) Employment –As soon as you employ someone in the UK, need to register with Her Majesty’s Revenue and Customs: PAYE – Pay As You Earn National Insurance –Employers Liability Insurance –EU Laws implemented slightly differently minimum protection the same Often enhanced locally

Practicalities (Cont…) Employment (Cont..) –Must have written terms including all basic items Name, Office, Salary, Hours, Holiday, Sickness, Disciplinary/Grievance procedure, Pension. –No more than 48 hours a week. –Minimum Wage (age based) >21 = £6.3118<>21 = £5.03<18 = £3.72 –Entitlement to Notice –Pensions

Practicalities (Cont…) Real Estate –The system of land ownership in essentially split into: Freehold - ownership is unlimited in time Leasehold - leasehold ownership is for a limited period –Registered and Unregistered –No restriction on foreign ownership –If thinking of taking premises in the UK, see legal advice.

Thank you for listening….Questions? Richard Franklin Direct Dial: International:

© EVERSHEDS LLP Eversheds LLP is a limited liability partnership. Doc: