UK Branch

It often happens that an overseas organization goes through the formation of a new business in the United Kingdom with a view to expanding into this country without setting up an incorporated body. Due to several reasons it can be carried out by using two entities:

• A branch: local agents operating in the UK conduct the activity on behalf of an foreign limited company
• A place of business: this is a regime used in case a company is not able to register as a branch. This is due to the fact that:
  • It is based within the UK (Gibraltar or Northern Ireland); or
  • It is not a limited company; or
  • The business conducted in Great Britain is not adequate to qualify it as a branch. Such range of activities could consist of warehousing, internal computer processing or merely a representative office.

Registration of a foreign company

The registration of an overseas organization operating in the United Kingdom is not mandatory, however according to the Companies Act 1985 every foreign company carrying on activities in Great Britain by setting up certain types of place of business must provide the Companies House with a set of documents.

When a substantial location is not present within the United Kingdom the registration will not be obligatory. For instance, an independent representative who carries on an activity on behalf of a firm or an administrator periodically travelling to the country to conduct business using an occasional venue are not deemed as being a place of business of a foreign company. Furthermore there are other categories of commercial businesses that are not able to register as overseas companies in the United Kingdom such as limited partnerships, partnerships, government agencies or unincorporated entities.

Registration of a Branch

The Registrar of Companies must receive a set of documents within one month of settlement of a Branch:

• Form BR1 (completed);
• A certified copy of the company’s constitutional documents (statute, charter, ongoing agreement, etc.). Such documents and accounts must be written in their authentic language however those ones that are not in English must be added with a certified translation into English. The certification of constitution has to be certified in the country of incorporation.
• A copy of the latest set of audited accounts published by parent law.

Registration of a Place of Business

The procedure for the registration of a place of business involves the submission of Form 691 accompanied by the memorandum and articles produced at incorporation and the fee.

The memorandum and articles of association (the overseas correspondent) must be certified as authentic and accurate for both categories of registration. They have to be written in their original language and whether it is not in English, they need to be added with a translated version.

The translated copy has also to certify that it correctly represents the original documents issued in another country.

Name restrictions for UK branch and place of business

Although the initial registration must be carried out in the company own corporate name, then the entity will be subject to the same rules on company names as any other British business. This involves that a name cannot be the same as one existing on the register or including sensitive terms and expressions which are not admissible.

When a company name is not considered acceptable, it will be ordered by the Secretary of State to use a satisfactory business name for operating in Great Britain. The new name must be registered within a certain period of time after which the company will no longer be allowed to conduct its activity in its original name in the United Kingdom.

UK branch, filing and disclosure requirements

The Companies House must be notified of any modifications, to the initial information entered, within 21 days of such adjustment. The following forms have to be submitted:

• Form BR2: modifications regarding the constitutional documents.
• Form BR3: modifications to the company information such as its name (£10 fee), legal form, accounting requirements, head office address, objects, share capital and governing law.
• Form BR4: changes of directors or secretary or of their details.
• Form BR5: modifications to the branch details such as company name, address and nature of activity.
• Form BR6: modifications to the person authorised to represent the company or accept service in the activity of the branch, or to their particulars.
• Form BR7: modification of the branch against which the constitutional documents and accounts of the company are registered.
• Form 225: modification of the accounting reference date of a company subject to filing accounts under section 700 of the Companies Act 1985.(see question 5).

Accounting conditions:

In case a branch represents an overseas company based in a country where the law requires the disclosure of audited accounts, a copy of those accounts (accompanied with a certified translation whether necessary) must be provided within three months of publication. All companies from European Economic Area (EEA) member states must comply, regardless of the fact that they are considered as “small” and authorized to provide modified accounts.

Companies House will receive accounts from all the branches which represent foreign companies based in countries where the law does not require the disclosure of audited accounts. This must be carried out within 13 months of the company’s accounting reference date (the yearly deadline for accounts to be made up) and comply with section 700 of the Companies Act 1985 (as amended by Statutory Instrument 1990 No. 440).

“Section 700 Accounts” must be associated with the company and not only with the UK branch. The deadline for them to be filed (a fee is charged for each set of accounts) is within 13 months of the first anniversary of the date of setting up a branch in the United Kingdom, where the accounting period of the foreign company is the first one and is longer than 12 months. The minimal documentation to be provided is made up of a balance sheet and a profit/loss account accompanied with notes. Director’s and Auditor’s accounts are not required; neither is information regarding the director’s compensation or pension contributions.

Information to be displayed:

A foreign company must show its name and the country of incorporation at every place where it conducts business in the UK. Furthermore a place of business is required to state the following list of details on its stationery (invoices, bill heads, letter paper and all official publications):

• Company name and the country in which it is incorporated;
• The limited liability of its members (where applicable).

In case of a branch, there is additional information to be mentioned on all stationery:

• Place and number of registration.

Where the branch is registered by a company from outside the European Economic Area, the following information has to be shown:

• The identity of the registry and, if applicable, the registration number in its parent state;
• The legal structure of the business;
• Where its head office is located and
• If it is the case, that the company is being closed down.

UK place of business, filing and disclosure requirements

Any changes have to be notified according to the following list:

• Form 692 (1) (a): modifications to the constitutional documents of a foreign company;
• Form 692 (1) (b): changes of directors or secretary or of their details;
• Form 692 (1) (c): modifications to the person authorised to accept service in the activity of the place of business, or to their particulars;
• Form 692 (2): change of corporate name of a foreign company;
• Form 225: modifications to the accounting reference date of a foreign company.

Branch and place of business conversions

In case the business carried on by a place of business increases as it becomes a branch, the registration procedure has to be followed. It involves the completion of Form BR1 to be submitted to Companies House along with the related fee. Copies of the constitutional documents and directors’ particulars will not be necessary in case the information filed at the previous registration is up to date

In case of a branch of a foreign company decreasing as it merely qualifies as a place of business, it must be re-registered as such using Form 691 along with the registration fee. Copies of the constitutional documents and directors’ particulars will not be necessary in case the information filed at the previous registration is up to date.

Since both a place of business and a branch of the same company are not allowed to coexist in the UK, if a place of business in being converted to a branch then any other registered place of business in Great Britain must be processed following two options: have their registration terminated (closure of public “file”) or start a re-registration as a branch. The registration of a branch will have the priority over a place of business registration(s).

In case the company closes its activity in the UK

When a branch or a place of business is shut down in the United Kingdom, Companies House will receive a letter of notice signed by a company officer or authorised person; from the date of receipt all the bonds to provide documents to this institution will be terminated.

Where a company has only one branch in the UK and it is shut down, its public file will be terminated. In case the main branch closes down, the procedure involves the notification to Companies House of the address of the branch where the constitutional documents are stored (Form BR7).