Where an overseas company (meaning any company other than one incorporated in Scotland, England & Wales or Northern Ireland) has a UK "establishment" it is required to register details of both the overseas company and establishment at UK Companies House.
The rules are set out in the Companies Act 2006 and The Overseas Companies Regulations 2009 (Regulations). It should be noted that these only apply to overseas companies and not other forms of business vehicle, such as partnerships.
What is a UK establishment?
The Regulations do not set out a specific definition of a UK establishment, but refer to the overseas company having either opened a "branch" or other "place of business". Companies House guidance and case law have clarified that this means having a physical presence in the UK such as an office. An overseas company may have one or more UK establishments.
Whilst a UK establishment can be given a name which differs from the overseas company, and this name can be used when trading in the UK, it is important to be aware that a UK establishment is not a separate person in law distinct from the overseas company – it will be the overseas company which will assume liabilities under the contracts it enters in the course of business.
What must I file?
Once an overseas company has opened a UK establishment it must submit a form OS IN01 to Companies House together with a copy of its constitutional documents and latest annual accounts (with a certified translation into English if necessary).
In addition to basic details of the overseas company, Form OS IN01 also provides that:
- the overseas company may choose a name for the UK establishment, which can then be used as the overseas company's name when trading in the UK (note that the overseas company must comply with trading disclosure rules when using this name); and
- once registered, Companies House will assign the overseas company with a code beginning "FC" and each UK establishment will be assigned a "BR" code.
- appointing an agent or distributor;
- appointing a franchisee; or
- incorporating a Scottish or English company as a wholly owned subsidiary of the overseas company.
Overseas companies should be aware that documents filed (such as accounts) become publicly accessible through the Companies House website.
What are the penalties?
Failure to register and make filings can leave the overseas company and its officers open to fines.
Are there alternatives to a UK establishment?
Depending on the type of business and extent of trading in the UK, an overseas company may wish to consider:
At Brodies we have extensive experience in working with overseas clients looking to establish a UK business – if you would like more information please contact a member of the corporate team.