Overseas companies operating in the UK

The legislation concerning the registration of a UK branch or place of business by an overseas company has recently changed.

What is a UK establishment?

A UK establishment is either a branch or a place of business set up by an overseas company in the UK.  

These terms are not defined, although in most cases there would be little practical difficulty in recognising from the extent of the overseas company's presence and activities that it had either a branch or a place of business here. The main difficulty used to be in deciding which of the two it was, as the registration requirements were different. 

Now it does not matter: under the Overseas Companies Regulations 2009 the same requirements apply to both.

A UK establishment is not a separate legal entity: it is simply the part of the overseas company operating in the UK.  A third party dealing with the UK establishment should always ensure that contracts and other documents are executed in the name of the overseas company and do not purport to be entered into by the UK establishment as if it had its own separate identity.

Form OS IN01

A UK establishment must be registered at Companies House within a month of being opened, using a 'Registration of an overseas company opening a UK Establishment' application (form OS IN01), which will include details about the overseas company, its directors, its address, and an address and contact details for the UK establishment. 

The current registration fee is £20.  It should take three to five working days for Companies House to process the form and the fee.  Same-day registration is available for £50. For a copy of form OS IN01, click here.

On registering its first UK Establishment (but not subsequent ones), an overseas company should also deliver to Companies House:

• a copy of its constitutional documents (charter, statute, operating agreement etc) certified as being true, complete and accurate; and
• a copy of its latest set of accounts (if required to be filed under the parent law).

All documents provided, including accounts, must be prepared in English or accompanied by a certified translation (which can add considerably to time and costs).

Companies House must be notified within 21 days of any changes to the registered particulars.

If an overseas company fails to register a UK establishment within one month of setting it up, under regulation 11 of the Regulations an offence is committed by the company itself and by every director or agent of the company who "knowingly and wilfully authorises or permits the default".

Name

The registered name of the UK establishment can be either the overseas company's own corporate name or an alternative name.

If the overseas company is an EEA company it may register its corporate name unless it is over 160 characters or it includes certain prohibited characters, signs, symbols or punctuation. There are additional restrictions for non-EEA companies, which may, for example, be prevented from using their own names if they are too similar to other names already on the register.

There are restrictions if an alternative name is chosen, and the requirements are different depending on whether the overseas company is registered in the EEA or not.

There are filing requirements and certain controls and restrictions if an overseas company wishes to change its corporate name or its business name or the name of the UK establishment.

Address and trading disclosures

Details of the UK establishment's address, as well as any changes to it, must be registered with Companies House. The UK establishment may be registered in any location in the UK. It must display a sign at each location where it carries on business, stating the overseas company's name and the country that it is incorporated in, and at the service address of every person in the UK who is authorised to accept service of documents on behalf of the overseas company.

All business correspondence, including emails and letters, must state the overseas company's name, and, in the case of a company registered in the EEA, the place of registration and registered number of the UK establishment in easily-legible form. There are fuller requirements for non-EEA incorporated overseas companies. (This is closely aligned with the regime for UK companies and limited liability partnerships.)

Representation

The overseas company is required to give the name and address of every person who is authorised to represent it in the UK, and any limitations on the scope of their authority, on form OS IN01. 

Anyone dealing with a UK establishment would be well-advised to insist that, when entering into agreements and other documents, a representative should state that he is acting as agent for the overseas company and that he has authority to sign the document on its behalf.

It may be expedient for the company to execute a power of attorney or similar document formally setting out the scope of authority conferred on its UK representatives, which can be shown to third parties as evidence of the representatives' authority. Subject to the parent law, it would be possible for the power to be governed by English law. If so, it would have to be a deed. English law simply requires the deed to be executed in the same way as the overseas company executes other documents under the parent law, and that it is delivered as a deed. See regulation 4 of the Overseas Companies (Execution of Documents and Registration of Charges) Regulations 2009 here .

Accounts

If the overseas company is required to prepare and publish accounts under its parent law, copies will need to be delivered to Companies House. A statement by the overseas company relating to the accounts, the relevant standards and their auditing must accompany these documents. Delivery to Companies House must be within three months from the date on which the accounts must be published in accordance with the parent law. 

If the overseas company is not required to publish accounting documents under the parent law, UK national legislation will apply.  This requires the directors of the overseas company to prepare accounts in each of its financial years in accordance with parent law, international accounting standards or the Regulations.  The accounts must be filed with Companies House within thirteen months after the end of the relevant accounting reference period.

In cases of default, each director of the company may be guilty of an offence and liable to a fine.

There are slightly different requirements in relation to the accounts and reports of credit or financial institutions.

Directors' details

The usual details of directors such as name, former name, date of birth, service and residential address, nationality, country of residence and business occupation are required. Although a director's residential address must be filed with Companies House, it will not be publicly disclosed.  Where an address appeared at Companies House as the usual residential address of a director, secretary or overseas representative immediately before 1 October 2009 for pre-existing branches and places of business, that address will be the deemed service address from 1 October 2009.  It may therefore be advisable to file new service addresses.

Charges

The Overseas Companies (Execution of Documents and Registration of Charges) Regulations 2009 contain registration requirements that mirror those for English companies. Charges of the specified type (such as charges on land, floating charges, charges on book debts, etc.) must be registered in respect of property situated in the UK within 21 days of the charge being granted. The person with the benefit of the charge normally handles registration.

As these regulations only affect companies with a UK establishment, it is no longer necessary to attempt a so-called Slavenburg registration against overseas companies that do not have a registered presence in the UK. 

The regulations still leave an element of ambiguity, however: there is no test to determine whether an asset is 'situated in' the UK. Although this is easily established for tangible assets such as land, the position is unclear for intangible assets such as financial instruments, which do not have a physical presence in the UK. Given that want of registration makes the charge void against liquidators and others, it is likely that precautionary filings in relation to these assets will be made.

Transitional Provisions

Overseas companies that had an unregistered branch or place of business in the UK immediately before 1 October 2009 are deemed to have opened a UK establishment on 1 October 2009 for the purposes of the Regulations.  They should have delivered a transitional return to Companies House not later than 31 March 2010 on form OS TN01 (available here ). 

Closure of a UK establishment

It was previously enough for an overseas company simply to notify Companies House in writing if it wished to close down a branch or place of business in the UK.  Under the Regulations, form OS DS01 must be submitted to Companies House, signed by a director, company secretary or permanent representative of the company.  The requirement to make regular filings then ceases. For a copy of OS DS01, click here.

For further details, see the Companies House booklet.

The Overseas Companies Regulations 2009 are available here.

The Overseas Companies (Execution of Documents and Registration of Charges) Regulations 2009 are available here.