Oversea Companies

1. Do I have to register my company?

The fact that an oversea company is carrying on business in Great Britain does not automatically mean that the company has to register. However, the Companies Act 1985 requires every oversea company which establishes some type of place of business in Great Britain to deliver certain documents to Companies House.

2. What is a place of business?

A place of business is a premises where there is a physical or visible indication that the company may be contacted there. An oversea company also has to register if it habitually conducts business from a particular location in Great Britain even if there is no physical sign of the company`s connection with it.

3. What companies do not have to register?

Registration is not required if there is no physical location in Great Britain. For example, an independent agent who conducts business on behalf of the company is not a place of business of an oversea company; neither is an occasional location such as a hotel where a director may conduct business during periodic visits to this country. Other types of commercial enterprises (for instance partnerships, limited partnerships, unincorporated bodies or government agencies) cannot register in Great Britain as an oversea company

4. What different regimes are there for registration?

There are two regimes for registration in Great Britain. These are: 

• a branch; and
• a place of business.

A `branch` is part of an oversea limited company organised to conduct business through local representatives in Great Britain rather than referring it abroad. A `place of business` is for companies who cannot register as a branch because:

• they are from within the UK (Northern Ireland or Gibraltar); or
• they are not limited companies; or
• their activities in Great Britain are not sufficient to define it as a branch. Such activities might include internal computer processing, warehousing, or simply a representative office.

5. What financial information must be sent to Companies House by oversea companies registered in Great Britain?

Branches of oversea companies whose parent law requires the publication of accounts which have been audited must deliver a copy of those accounts within three months of public disclosure. This applies to all companies from European Economic Area (EEA) member States even where a company is categorised as `small` and allowed to deliver modified accounts, even to the extent of them being unaudited.

All:

• places of business and
• branches of oversea companies whose parent law does not require the publication of audited accounts

– must, within 13 months of a company`s accounting reference date (see question 7), deliver accounts to Companies House that comply with section 700 of the Companies Act 1985 (as amended by Statutory Instrument 1990 No. 440). Such accounts are known as `Section 700 Accounts` and must relate to the company and not solely of the place to business or branch.

An annual document-processing fee of £30 should be sent with each set of accounts. Cheques should be made payable to Companies House.

Note: All oversea companies must deliver accounts – there are no exceptions. The accounts must relate to the company as a whole and not just that part of the company that operates in Great Britain

6. What information should `section 700 accounts` contain?

A company subject to section 700 of the Companies Act 1985 (see question 5) is required to prepare accounts consisting of, as a minimum, a balance sheet and profit and loss account, with a minimum of notes. No directors` or auditors` report is required, neither are details of directors` emoluments or pension contributions (which are excluded by virtue of the dis-application of section 232 and schedule 6 of the Companies Act 1985 by virtue of the schedule to SI 1990/440).

7. What is an accounting reference date, and how is it fixed?

The accounting reference date of a company is the date in each year to which the accounts are to be made up. For a new registration of a place of business or branch subject to `Section 700 Accounts` (see questions 5 and 6) the accounting reference date is set with reference to the date of its establishment in Great Britain.

For companies established on or after 1 April 1996, the accounting reference date is initially set as the last day in the month in which the first anniversary of the date of establishment occurs. Slightly different rules apply to companies established before 1 April 1996.

Accounting reference dates can be changed.

8. What period should `section 700 accounts` cover? The first accounting reference period (see question 7) of an oversea company must run from the date of its establishment in the UK and not the first day of trading if this is different. The first accounting reference period ends on the first occurrence of the accounting reference date. However accounts may be made up to a date within seven days either side of that date if this is more convenient. Subsequent accounting reference periods run from the day after the end of the previous accounting reference period until the next anniversary of the accounting reference date or to a date within seven days of it.

9. Are there special accounting rules for credit and financial institutions?

Although the rules that govern the filing requirements for credit and financial institutions derive from different law, in practice the requirements are similar to those for oversea companies. Only in some very rare circumstances will company accounting disclosure requirements be different under the Bank Branches Directive.

Certain credit institutions may not be companies and cannot therefore register a branch in Great Britain under British company law. However, branches of such institutions must still deliver copies of their accounts to Companies House.

An institution which is required by its parent law to prepare, but not register, audited accounts, need not deliver copies of its accounts to Companies House provided that:

• they are made available for inspection at each branch in Great Britain; and
• copies are available on request at a cost not exceeding the cost of supplying them.

Concessions on the fling of unaudited accounts and on the acceptance of consolidated accounts do not apply to credit and financial institutions because these concessions are not available in the Bank Accounts Directive.

10 What is a credit institution?

A ‘credit institution’ is defined as an undertaking whose business is to receive deposits or other repayable funds from the public and to grant credits for its own account. It can be a company but may be some other form of entity.

11 What is a financial institution?

‘Financial institution’ is given meaning in the Companies Act 1985 (as amended) by reference to Article 1 of the Bank Branches Directive (89/117/EEC). This Article does not provide a definition itself but instead refers to other directives. Our interpretation is that a financial institution must:

(a) be a limited company; and

(b) if incorporated in a Member state, be required to file in its home state accounts under the relevant national legislation implementing the Bank Accounts Directive (86/635/EEC) rather than the fourth Directive (78/660/EEC); or

(c) if incorporated outside the EEA, and not being a credit institution, undertake one or more of these activities:

• ancillary banking services (defined as ‘an undertaking the principal activity of which consists of owning and managing property, managing data processing services or other similar activity which is ancillary to the principal activity of one or more credit institutions’);
• lending (including, among other things, mortgage credit, factoring with or without recourse, financing of commercial transactions such as forfeiting);
• financial leasing;
• money transmission services;
• issuing and administering means of payment (eg credit cards, travellers’ cheques and bankers’ drafts);
• guarantees and commitments.
• trading for own account of for account of customers in:
  • money market instruments (cheques, bills, CD’s, etc);
  • foreign exchange;
  • financial futures and options;
  • exchange and interest rate instruments;
  • transferable securities;
  • participation in securities issues and the provisions of services related to such issues;
  • advice to undertakings on capital structure, industrial strategy and related questions and advice and services relating to mergers and the purchase of undertakings;
  • money broking;
• portfolio management and advice
• safekeeping and administration of securities.

12. What details need to be shown on company stationery and displayed?

A oversea company must exhibit at every place where it carries on business in Great Britain the company’s name and the country in which it is incorporated.

A company which registers a place of business must state on all letter paper, bill heads, invoices and other official publications of the company:

• the company`s name and country of incorporation; and
• that the liability of the members is limited, if this is the case.

A company which registers a branch must, in addition to the above, show on all letter paper and order forms used for the business of the branch:

• the place of registration and registration number of the branch.

Additionally, every company which registers a branch and is from outside the EEA, must also show:

• the identity of the registry and, if applicable, the registration number in its parent state;
• the legal form of the company;
• the location of its head office; and
• if applicable, that fact that the company is being wound up.

13. What if my activities in Great Britain increase or decrease?

If the activities of a limited company that registers a place of business change to the extent that it now qualifies as a branch, it must register as such by delivering a completed Form BR1 to Companies House with the registration fee. In such cases, if the information previously filed at Companies House is up to date, copies of the constitutional documents and directors` details are not required.

Similarly, if a branch of an oversea company changes to the extent that it only qualifies as a place of business then it must re-register as such by delivering a completed Form 691 together with the registration fee. If the information previously filed at Companies House is up to date, copies of the constitutional documents and directors` details are not required.

On conversion of a branch to a place of business, any establishment in another part of the United Kingdom, for example, Northern Ireland, included under the original branch registration must be registered as a place of business.

On conversion of a place of business to a branch, any registered place of business in another part of the United Kingdom must either terminate its registration by having its public file ‘closed’, or it must be re-registered as a branch. A company cannot have both a place of business registration and a branch registration in the UK at the same time. A branch registration will take precedence over a place of business registration(s).

14. What if my company ends its activities in Great Britain?

If a company closes a place of business or a branch in Great Britain, it must give notice to this effect by delivering a letter signed by an officer or authorised person of the company to Companies House. All obligations of the company to deliver documents to Companies House cease from the date of receipt of the notice.

If a company closes its only branch in Great Britain then the company’s public file will be `closed`. If it is not the only branch, but was originally the principal branch, then Form BR7 must be delivered to notify Companies House of the branch at which the constitutional documents are kept.