COMPANY REGISTRATION: EXPLANATION OF THE WORKFLOW — IDEA, SUBMISSION, AND COMPANIES HOUSE PUBLICATION

We provide it both as a standalone service (to end clients and professional intermediaries) and as part of more complex client tasks helping clients to implement a business idea.

No client business structuring is complete without creating a legal entity and opening a business bank account. Whether it's an LLP, LLC, or another form, all processes roughly follow the same workflow, and, usually, company formation does not present any particular difficulties.

In this article, I will share knowledge and know-how accumulated over almost 20 years of corporate law practice in Germany, Switzerland, Austria, the United Kingdom, and other countries.

Online company registration is replacing personal visits to the notary.

Just 5-10 years ago, the common practice for any company-related actions involved visiting a notary, having shareholders' or directors' signatures certified and then transmitting the certified documents to the trade register or Companies House.

In some countries, in the process of company formation, it was necessary not only to submit documents to the register but also to an official newspaper that published the changes (in other words, "announced" them publicly).

Offline Company registration had one undeniable advantage: it always allowed the avoidance of problems related to missing or deceased participants, illegal alienation of shares and stakes in companies, and various frauds related to identity theft and document forgery.

It remains unclear what is better – meeting all clients in person or conducting these meetings on Zoom.

Digital company registration has existed for the last five years and is gradually becoming more popular.

Companies House in the United Kingdom started implementing the submission of documents through an online system more than ten years ago, and gradually, other countries began to adopt this practice.

Registering a company today online in Switzerland became possible with the launch of a national program and the creation of the so-called electronic window (E-Schalter), initially in the canton of Zug (the last tax haven of the continent), and then in other cantons.

Around 2020, legislative changes came into effect (COVID and various accompanying cataclysms in the world directly influenced this) regarding online identification, and some notaries began to conduct sessions directly on ZOOM.

Company registration in Switzerland is one of the most complex and confusing, and for us, it is a real breath of fresh air: we do not spend a lot of time traveling around the country to prepare documents for registration. When you service more than 200 companies, this is a significant saving for both clients and lawyers in terms of the company formation process.

The documents and procedures for company formation may have different names, but they are generally similar in nature and function.

Private limited company and offshore company registrations essentially have no significant differences from other legal entities in terms of publication in the government or public register (Trade register, Companies House) or document preparation.

Following the implementation of OECD and FATF requirements, including those regarding the erosion of the tax base, many banks have simply stopped opening a business bank account for companies from countries on black, grey, and sometimes even white lists.

This gradually diminishes the popularity of offshore company formation, but as a planning tool, they retain their popularity in various complex structures. With the help of a company formation agent, it is possible to turn any business idea into a legally registered company.

In the process of company formation, if all steps of document preparation are completed, and the trade register or Companies House has accepted, reviewed, and published the company data, then it is considered that the company data is publicly announced, and this is the guarantee company can start the commercial activity.

To confirm this, it is necessary to provide evidence (at least to open a business bank account: no bank will open a bank account without publication in Companies House, for example).

You can check a company's registration in Companies House in the UK or Handelsregister in Germany by making an online request (if the register is open), or consulting a lawyer (if the register is closed) or a company formation agent.

Despite the possibility of checking a company's registration in the trade register or Companies House, you may not always get complete information about the company's registered office address, the company certificate of registration, shareholders, and other details (it may also depend on the Trade register or Companies House workload).

Germany, for example, has closed data on beneficiaries based on protecting private data (although the law on the disclosure of beneficiaries still exists).

The company registration number in the Trade Register allows you to make an online request to the trade register for a specific company.

In the Swiss Confederation, there is a nuance related to the fact that each of the 26 cantons is essentially a separate state: with its police, parliament, court, and of course — trade register.

At some point, you may discover that there is a company registered with the same company name (but a different registration number) in another canton.

Having the company registration number allows you to make an online request and get information about a specific company formation process.

The company registration number is assigned during the trade register (Companies House) registration process and remains until the end of the company's existence.

For your convenience, we publish a list of registers registering companies in certain countries.

Who Needs to Register: For a UK company, businesses must register for VAT if their VAT taxable turnover exceeds £85,000 over the past 12 months or is expected to surpass this threshold in the next 30 days. Non-UK businesses supplying to the UK are also required to have a registered office address.

Company Documents Required: For a UK limited company, the necessary company documents include the company registration number, business bank account details, Unique Taxpayer Reference (UTR), and details of the annual turnover. Individuals and partnerships need their National Insurance number, an identity document, business bank account details, UTR, and annual turnover details.

Registration Process: Registration of a UK company can be done online via the Government Gateway or GOV.UK VAT registration portal. The process includes providing accurate business details and submitting the application.

Timeline: The time to receive a VAT registration certificate for a UK company is generally within a month, but most businesses receive it within 10 working days.

Cost: There is no cost for VAT registration itself, but there may be costs associated with compliance, such as accounting software for VAT returns under the Making Tax Digital (MTD) legislation.

Reclaiming VAT on Past Purchases: Businesses can reclaim VAT on certain goods and services purchased before registration, subject to specific conditions and time limits.

Who Needs to Register: All businesses in Germany with a turnover exceeding a certain threshold (currently €22,000 in the first year and expected €50,000 in the next year) must register for VAT.

Company Documents Required: Businesses typically must provide their tax ID, business registration documents, and proof of business activities.

Registration Process: VAT registration is usually done through the local tax office (Finanzamt). The process can often be initiated online through the Elster platform, Germany's electronic tax filing system.

Timeline: Depending on the local tax office, the registration process can take several weeks.

Cost: There is no VAT registration fee itself, but costs may be associated with tax advisory or accounting services.

Company incorporation in Germany, the UK, and Switzerland involves distinct procedures (for example, choosing the form of the company and company name), cooperation with company registration agents, timelines, necessary documents, and associated fees. Each country has its regulatory framework and requirements for establishing a business entity.

Sources:

1. https://www.gov.uk/government/organisations/companies-house
2. https://www.handelsregister.de/rp_web/welcome.xhtml
   
3. https://en.wikipedia.org/wiki/OECD
   
4. http://GOV.UK
5. https://e-justice.europa.eu/home?action=home

Legal disclaimer. This article does not constitute legal advice and does not establish an attorney-client relationship. The article should be used for informational purposes only.