Morgan Russell Solicitors

Companies Act 2006 - Overseas Companies

Provisions of the Companies Act 2006 regarding overseas companies come into force on 1st October 2009.

If an overseas company sets up an establishment in the UK, it is under an obligation to register it. 

There are alternatives to an establishment - namely appointing an agent or setting up a subsidiary.  An overseas company therefore needs to carefully consider all options before making a decision as to how to set up in the UK.

An establishment is broadly defined as a branch, or any place of business that is not a branch.  This would include, for example, premises indicating that the company may be contacted there or anywhere a company regularly conducts business.

There is an obligation on an overseas company to register an establishment within one month of opening.  There are ongoing filing requirements that need to be complied with and an overseas company needs to notify the Registrar of Companies if it closes a registered UK establishment.

In addition to general filing obligations, an overseas company also needs to comply with accounting requirements.  In broad terms, they are:-

  • If the overseas company is required to file accounts under the law of its country of incorporation, the overseas company is required to deliver to the Registrar of Companies copies of all accounting documents that it is required to disclose under that law.
  • If the overseas company is not required to file accounts under the law of its country of incorporation and is incorporated in an EEA country, it does not need to file any documents.
  • If the overseas company is not required to file accounts under the law of its country of incorporation and is incorporated in a non-EEA country, it has three options when choosing an accounting framework, namely:-

-       overseas accounts in accordance with the Companies Act 2006;

-       accounting law of its country of incorporation; or

-       international accounting standards.

There are penalties for non-compliance with requirements for initial registration and amending the register.  An offence is committed by the overseas company and every officer or agent of the overseas company who knowingly and wilfully authorised or permitted the default.

An overseas company carrying on business in the UK must make sure its name and country of incorporation is displayed at:-

  • Every location in the UK at which it carries on business; and
  • At the service address of every person resident in the UK authorised to accept service of documents on behalf of the company.

An overseas company carrying on business in the UK must include its name on all:-

  • Business letters, notices and other official publications;
  • Its bills of exchange, promissory notes, endorsements and order forms;
  • Cheques purporting to be signed by or on behalf of the company;
  • Orders for money, goods or services purported to be signed on behalf of the company;
  • Bills of parcels, invoices and other demands for payment, receipts and letters of credit;
  • Applications for licences to carry on a trade or activity;
  • Other forms of its business correspondence and documentation;
  • Its websites.

An overseas company that has a UK registered establishment must state where the establishment is registered and its registered number on all its business letters, order forms and websites.  In addition, an overseas company that is not incorporated in an EEA country must also include the following on its business letters, order forms and its websites:-

  • The company’s country of incorporation;
  • The identity of the registry, if any, in which the company is registered and its country of incorporation;
  • If applicable, the number with which the company is registered in that registry;
  • The location of its head office;
  • The legal form of the company;
  • If the liability of the members of the company is limited, the fact that it is a limited company;
  • If applicable, the fact that the company is being wound-up or is subject to other insolvency proceedings,  or to an arrangement, or to a composition, or any other proceedings.

An overseas company must, within 5 working days of receipt of a written request, disclose the address for service of any person in the UK who is authorised to accept service on its behalf.

Any charges created by an overseas company that has a registered UK establishment need to be registered.  In addition, if the property that is subject to the charge is situated in the UK, the charge needs to be registered.

The following types of charges also need to be registered:-

  • A charge on land or any interest in land other than a charge for rental of a periodical sum issuing out of land;
  • A charge created or evidenced by an instrument which, if executed by an individual, would require registration as a bill of sale;
  • A charge for the purpose of securing any issue of debentures;
  • A charge on uncalled share capital of the company;
  • A charge on calls made but not paid;
  • A charge on book debts of the company;
  • A floating charge in the company’s property or undertaking;
  • A charge on a ship or aircraft or any share in a ship;
  • A charge on goodwill or intellectual property.

In addition to the registration requirements, there are also requirements to keep copies of the charges and a register of charges and to make them available for public inspection.

In relation to existing situations:-

  • If an overseas company has been complying with the existing regime, it needs to file a transitional return by 31st March 2010.
  • If an overseas company has an unregistered branch in the UK, it will be treated as having opened the establishment on 1st October 2009 and it will need to comply with all of its obligations.

Further information

If you require any further information or assistance, please contact Debbie Turner or Paul Morgan of Morgan Russell on 01372 461411.

The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.
clever girl