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Corporate structure for agent ...

... of UK co owned overseas

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(Apologies - didn’t realise how long this post would be until I finished).

A client of mine X Ltd is drawing up a business plan to act as an ‘agent’ for overseas businesses (F, for foreign)) wanting to operate in the UK. 

The idea is that X incorporates newco (N) for each client. The entire operation of newco (sales, finance, marketing, logistics etc) is run by X and 3rd parties provided by X. N would be owned 100% by F. The sole director would be, say, Mr F.

Mr X had read (I didn’t know that this was the case) that Ltd’s now must have a UK based director. Which means that the plan to have Mr F as the sole director won’t work. New consideration is to have Mr R (a UK representative of F - family member, business associate etc) as the (nominal) director. However, it’s probably safe to assume that F won’t have any UK representatives. 

My assumption is that X (or rather Mr X, the MD and majority shareholder of X) would be seen as a shadow director by the Companies Act so would end up taking directors responsibility for any mishaps anyway. 

The question posed (after all that), is does anyone have any suggestions as to what the structure of N should be?

One thought I had was that X2 Ltd should be CoSec so they can sign things, open the bank etc. 

 

Many thanks!

Replies (2)

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Caroline
By accountantccole
13th Feb 2019 13:33

You don't need to have a UK based director.
It helps the argument for F's home country taxes, that there isn't a branch abroad with all the decisions being made there if there is someone else who is making decisions in the UK.
Opening bank accounts is likely to be an issue. If X is so involved is there any reason X can't be a director too?

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Replying to accountantccole:
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By atleastisoundknowledgable...
13th Feb 2019 14:08

The bank had told Mr X that there had to be - your response has made me go back to look at .gov and reaffirmed my original thought, thanks.

Mr X doesn't want to be a director for potential liability issues, albeit he may end up there as a shadow director anyway. He'll be taking legal advise to see if he can protect himself in any way.

That aside, I think the way forward will be X to be sole s/holder & Mr X sole director on incorp of N, then once bank account etc all open and everything ready to go, trans shares to F and directorship to Mr F (UK service address). I think that this is in essence how solicitors/managing do it when they set up RMCs?

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