Incorporation services in Northern Ireland

Northern Ireland, as part of the UK, has a mature corporate operating environment and one that is not subject to radical developments. Instead, the major change in the region is a focus on rebalancing the Northern Ireland economy and moving away from historic economic models that have been constrained by Northern Ireland’s past conflict.

The Northern Ireland economy has in the past been dominated by manufacturing industry and agriculture, but there has been a shift over the last 30 years to a more service-based economy including the public sector. The largest private sectors in Northern Ireland are wholesale and retail, manufacturing, and business and professional services (real estate and renting and business activities). However, as the Varney Review argued, there are also significant opportunities for the Northern Ireland economy which can be seen in the creation of new markets in other sectors such as information and communication technologies and financial services.

The government has recognised that rebalancing of the Northern Ireland economy will depend on high productivity sectors becoming larger and firms within all sectors increasing their productivity.

Most common forms of business vehicle

Companies

The company is the most common form of business entity and the principal corporate legislation is contained in the:

  • Companies Act 2006.
  • Insolvency (Northern Ireland) Order 1989.

This legislation regulates the formation and dissolution of companies, share capital, distributions, duties and conduct of directors, publication of accounts and other documents, and the management and administration of companies. The advantage of a company is that it is an entity separate from its shareholders.

There are three types of limited company:
Private company limited by shares where members’ liability is limited to the amount unpaid or shares they hold.
Private company limited by guarantee where members’ liability is limited to the amount they have agreed to contribute to the company’s assets if wound up.
Public limited company where the company’s shares may be offered for sale to the general public and members’ liability is limited to the amount unpaid as shares held by them.

Partnerships

Both general and limited partnerships are commonly used. Unlike companies, partnerships have no separate legal personality. The law relating to partnerships is contained in the:

  • Partnership Act 1890, which applies to both types.
  • Limited Partnerships Act 1907, which applies to limited partnerships only.

The main type of partnership is the general partnership. An ordinary/general partnership is defined as the relationship subsisting between persons carrying on a business in common with a view to profit (section 1(1), Partnership Act 1890). A partnership agreement must be drawn up and the basic terms to be considered are contained in the Partnership Act 1890.

A limited partnership is defined as consisting of both (section 4(2), Limited Partnership Act 1907):
One or more persons called general partners, who are liable for all debts and obligations of the firm.
One or more persons called limited partners, who:

  • at the time of entering into the partnership contribute a sum or sums as capital or property valued at a stated amount;
  • are not be liable for the debts or obligations of the firm beyond the amount so contributed.
In return for limited status the limited partner has no role in the management of the firm.

The Limited Liability Partnership Act (Northern Ireland) 2002, which came into force in Northern Ireland in July 2003, provides for limited liability partnerships which would allow the partnership structure to be retained while protecting the personal assets of a partner against claims for which they have no responsibility.

Northern Ireland LLP – Tax planning credentials

Subject to the use of the correct structure and that there are no N.I./UK activities or ultimate British beneficial owners it seems that the Inland Revenue will not seek UK tax at either a corporate or individual level.

If a Northern Ireland LLP has only non-resident partners & no N.I./UK Business, it will not be taxed in Northern Ireland and UK.

There is no requirement for a N.I. LLP to have a British partner. As explained below no taxation should arise on non-resident partners on income from a N.I. LLP where the business of that Northern Ireland LLP is managed, controlled and carried out outside the United Kingdom.

General LLP benefits

Northern Ireland and the whole United Kingdom is actively pro-business and is relatively free of bureaucracy;
A virtual office presence can be established in Belfast to give the impression of being a domestic LLP;
The Certificate of Formation, Articles of Organization (if applicable) and the LLP Agreement are remarkably flexible;
All legal documents supplied from the appropriate division of corporations can be quickly apostilled pursuant to the Hague Convention of 1961;
Highly respectable and credible jurisdiction;
Full range of services office address options;
N.I. LLP’s can be registered in as little as 24/48 hours (if expedited);
Well-educated population;
Highly developed corporate and general law;
Prestige of having a N.I./UK registered entity;
Low annual Companies House Duties;
Fiscal transparency for both domestic and non-resident LLP’s;
Ability of non-resident LLP’s to be externally managed in low tax, tax-free or tax exempted jurisdictions.
We offer a range of options to help you lodge your LLP at Companies House quickly and easily and ensure you can administer it with the minimum of fuss once it is registered. Of all the legislation of the last few years, the “creation” of limited liability partnerships is one of the most interesting. The essence of a limited liability partnership for practical purposes is as a vehicle to contain a partnership of any size where partners may be at risk from the careless or accidental negligence of a colleague. For example, partners in International accountancy firms would be protected from personal liability if a claim was successfully pursued by a major client. Partners in a construction business would be protected if a new building collapsed, causing high level claims against them.

Other partnerships may be tempted to use a limited liability partnership for the same reason. A limited liability partnership may also be appropriate for a partnership where some partners are not actively involved. They might have once been called “sleeping” partners. This structure will be suitable for people engaging together in a property or finance venture.

A limited liability partnership is unlikely to be useful for a small trading company of any sort because a conventional limited company is likely to perform an appropriate role at less cost.

Tax exemption – the highest degree of credibility

A limited liability partnership is a new form of legal business entity with limited liability. Limited liability partnerships are taxed as partnerships but in most other respects they are very similar to companies. They must have at least two, formally appointed, designated members at all times. (Designated members are similar to executive directors and the company secretary of a company). If there are fewer than two designated members then every member automatically becomes a designated member.

N.I. LLP’s provided by our Firm must be formed with a view to making profit and for the purpose of undertaking the international trade of goods or services either as principal or agent or for the provision of consultancy or related services.

Designated members

Every limited liability partnership must at all times have at least two, formally appointed designated members. (Designated members are analogous to the executive directors and the company secretary of a company). The designated members are responsible for (in case the LLP generates income within N.I./UK, only):
Appointing an auditor (if one is needed);
Signing the accounts on behalf of the members;
Delivering the accounts to the Registrar;
Notifying the Registrar of any membership changes or changes to the registered office address or name of the limited liability partnership;
Preparing, signing and delivering to the registrar an annual return (Form LLP363); and
Acting on behalf of the limited liability partnership if it is wound up or dissolved.
Designated members are liable in law for failing to carry out these legal responsibilities. If there are fewer than two designated members, then every member is deemed to be a designated member. (The limited liability partnership may have decided that all members will be designated members or that only some members will be designated).

With the agreement of the other members, a member may become a designated member at any time. Designated members enjoy the same rights and owe the same duties towards the limited liability partnership as any other member. These mutual rights and duties are governed by the limited liability partnership agreement and the general law. However, the law also places additional responsibilities on designated members.

Members

There can be an unlimited number of members.

Shelf LLP´s available

Yes – list available upon request.

Time to incorporate

Approx. 24 to 48 (working) hours.

Our company licensing services

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Disclaimer: While TBA & Associates strives to make the information on this website as timely and accurate as possible, the information itself is for reference purposes only. You should not substitute the information provided in this article for competent legal advice. Feel free to contact TBA Customer Services for advice on your specific cases.

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