Some limited companies are registered in England & Wales, while others are registered in Scotland due to the UK’s division into four countries and three separate jurisdictions (legal systems).

England and Wales share a combined legal system, forming a single jurisdiction. In contrast, Scotland and Northern Ireland have their own independent legal systems, making them distinct jurisdictions.

Let’s explore how this distinction affects the setup and operation of a limited company in the UK.

A unified company registration system across the UK

Although a limited company can only be incorporated (registered) in one jurisdiction, the UK has a unified system for company registration. This is because company incorporation is a reserved power of the UK Parliament at Westminster.

As a result, companies across all three jurisdictions are incorporated in the same manner—through Companies House, under the Companies Act 2006.

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To facilitate incorporation throughout the UK, Companies House has separate registrars in England & Wales, Scotland, and Northern Ireland. However, once a company is incorporated in one of these jurisdictions, it must operate according to the laws and regulations of that specific legal system.

• Companies formed in England & Wales are registered at Companies House in Cardiff and are subject to English Law.
• Companies formed in Scotland are registered at Companies House in Edinburgh and are subject to Scots Law.
• Companies formed in Northern Ireland are registered at Companies House in Belfast and are subject to Northern Irish Law.

Regardless of where a company is registered in the UK, it is free to operate in any UK or overseas country. However, it must adhere to the laws and regulations of its registered jurisdiction, as well as those in any other country where it conducts business.

Practical differences between companies in England & Wales and Scotland

Company law is broadly similar across the UK’s legal systems, but there are some practical differences to consider:

• Registered Office: The registered office (headquarters) of a limited company must be situated in the jurisdiction where it is incorporated:
  • England & Wales: Registered office must be in England or Wales.
  • Scotland: Registered office must be in Scotland.
  • Northern Ireland: Registered office must be in Northern Ireland.
• Insolvency: Scots Law and English Law have significantly different insolvency regimes, especially regarding procedural rules.
• Taxation: Scotland has a different system of taxation and business rates compared to England & Wales. However, most tax powers, including Corporation Tax, VAT, Personal Allowance, and National Insurance rates, remain reserved to Westminster.
• Contract Law: While English Law and Scots Law are closely aligned in contract law, the execution of contracts varies between England & Wales and Scotland. This is crucial for your Terms of Business and for managing court proceedings if you need to enforce contract terms.
• Property Law: There are notable differences in property law and the registration of company charges between England & Wales and Scotland.
• Employment Law: Variations exist in the formation and signing of contracts, third-party rights, holidays, time limits on claims against employers, and the procedures for employment tribunals and civil court cases.

Although many of these variations are minor, it is important to familiarize yourself with them if you plan to set up a company in the UK. Understanding contract law, in particular, could significantly impact how you do business with clients and suppliers.

UK-wide company reporting and filing rules

All UK companies, regardless of their jurisdiction of incorporation, have the same reporting and filing obligations to both the registrar and HMRC.

These obligations include:

• Filing annual accounts and confirmation statements with Companies House
• Reporting any changes to key company details
• Submitting Company Tax Returns and VAT Returns
• Paying all applicable taxes

Can I change which jurisdiction my company is registered in?

Once your company is incorporated, you cannot change its jurisdiction of registration. This means you cannot move your registered office to a different country, but you can relocate it to a different address within the same jurisdiction.

The only way to change a company’s jurisdiction is to wind up (close) the existing company and incorporate a new one in the desired jurisdiction. Depending on your business’s status and complexity, this process can be both intricate and expensive.

• Can a Scottish Company be moved to England?

A more practical solution would be to base your company in your preferred jurisdiction whilst maintaining its registration and registered office in the country of incorporation. It’s common for companies to establish their operations in other places as their needs change, so this option is worth considering if it could benefit your business.