Opening a business account in UK

[eldertech24]

Hi everyone,
my names is Phil and i am from Italy and i live in Italy, i few months ego a opend a LTD in UK with a UK accountant, because a red that there wasn't any problem opening a business for non-residents in UK, now i met a guy who lives in the UK and i want him to be my business partener witha share of 15% of the company. Lately we are having problem opening a business account for my LTD, we tried HSBC but they refuse, With Barclays, the documentation is massive, and I cannot find a straightforward answer, natwest, monzo, starlingbank
One of the requirements is "All Persons of Significant Control (PSCs) of your Limited Company or LLP are UK residents and individuals rather than a company (i.e. no corporate shareholders).", i dont really trust about online bank account the reviews are not that good, they freeze account without even telling you. i'd rather have a phisycal bank. Whats the point let non-resident people open LTD when they struggle open up business bank account.
I hope someone who might had the same situation help and point me in the right direction, i'll appriciate that, thanks for your time

 

[fisicx]

You are mixing two different things.

The limited company and bank account are independent of each other. The bank are very cautious because of money laundering legislation and new rules over company ownership.

Why do you need a UK company?

 

[eldertech24]

Because i wanted to open a business in Italy and they ask me 2000 euro to open a business plus the costs to maintain the business which are to much, costs to open a SRL in italy are too expensive for me, UK on that side and bureaucracy is better then open a business in Italy

 

[Ozzy]

I’m afraid you are going to find it difficult. The UK banks have recently been fined many millions for allowing money laundering to happen on their watch so are now very nervous to have overseas customers. You’re going to struggle, sorry!

 

[eldertech24]

so what the point of let non-resident people open business if they few chances of open a bank account, do you know anyone in the same situation and if so how he did fix it, who should a talk to and i nedd to move, thanks

 

[Mark T Jones]

I have an accountant connection who specialises in helping Italian businesses set up operations in the UK - though if you are only doing so to save expense and bureaucracy- without actually trading in the UK, I suspect it will backfire.

Apart from afore-mentioned money laundering, banks are kind of fed up with opening accounts for small businesses that don't get used

 

[fisicx]

@eldertech24 - There is no legal requirement to have a business bank account when you open a company. You can start the business using your UK personal bank account.

Companies House will let you create a company. What happens after that is a different set of rules and regulations.

As already suggested, if you only reason to open the company is to save money you may well discover the annual costs and bureaucracy are no different.

Do you actually plan to trade in the UK?

 

[eldertech24]

I have an accountant connection who specialises in helping Italian businesses set up operations in the UK - though if you are only doing so to save expense and bureaucracy- without actually trading in the UK, I suspect it will backfire.

Apart from afore-mentioned money laundering, banks are kind of fed up with opening accounts for small businesses that don't get used

the business will operate in UK at the beginning, and i would like to expand overseas leter on, do you mind give me the contact i'll have a look thanks

 

[eldertech24]

@eldertech24 - There is no legal requirement to have a business bank account when you open a company. You can start the business using your UK personal bank account.

Companies House will let you create a company. What happens after that is a different set of rules and regulations.

As already suggested, if you only reason to open the company is to save money you may well discover the annual costs and bureaucracy are no different.

Do you actually plan to trade in the UK?

yes i will trade in UK at the beginning, i have a business partner who lives in UK

 

[Mark T Jones]

the business will operate in UK at the beginning, and i would like to expand overseas leter on, do you mind give me the contact i'll have a look thanks

If you send a DM with your details I will connect you.

You appreciate that he will charge fees?

 

[eldertech24]

If you send a DM with your details I will connect you.

You appreciate that he will charge fees?

I sent you a DM

 

[ash799]

@eldertech24 - There is no legal requirement to have a business bank account when you open a company. You can start the business using your UK personal bank account.

Companies House will let you create a company. What happens after that is a different set of rules and regulations.

As already suggested, if you only reason to open the company is to save money you may well discover the annual costs and bureaucracy are no different.

Do you actually plan to trade in the UK?

Hi
For a LTD company isn’t a business account a legal requirement?
You can use your personal account if your
A sole trader but for LtD companies I’m quite sure you would require a business account legally

 

[fisicx]

As far as I can tell all you need to do is keep the accounts separate: one for personal and one for the business. It doesn’t say it has to be a business bank account although it is recommended.

Maybe one of the accountants here can clarify.

 

[Ozzy]

For a LTD company isn’t a business account a legal requirement?

It is not a legal requirement, but it is highly recommended because the property of a Limited Company (which includes the cash in the bank) is the legal property of the Limited Company and is not the property of the company owners, directors, etc. So having a separate bank account is recommended as it helps keep it separate.

 

[ash799]

As far as I can tell all you need to do is keep the accounts separate: one for personal and one for the business. It doesn’t say it has to be a business bank account although it is recommended.

Maybe one of the accountants here can clarify.

Yes if anyone can clarify this position it will be much appreciated, becuase getti no a decent business bank account these days is no easy feat, but I suppose keeping business and personal transactions will be just as challenging, over the years I’ve always been told for a ltd company a separate business acc is always required whereas a ST can use their personal account.
Please can anyone clarify the position
Thanks

 

[ash799]

It is not a legal requirement, but it is highly recommended because the property of a Limited Company (which includes the cash in the bank) is the legal property of the Limited Company and is not the property of the company owners, directors, etc. So having a separate bank account is recommended as it helps keep it separate.

Sorry just seen your reply,
Thank you for the clarification Ozzy, that makes sense. Suppose it’s easier for accountants to have a seperate account to make their job easier so they’ll recommend their clients to have a separate account for the business

 

[fisicx]

A government spokesperson said:

If you set up as a sole trader (‘self-employed’) you can use your personal bank account. On the other hand, a limited company must have a separate business account, as it is a distinct legal entity. There is a legal requirement to keep your personal and business finances separate.

Can a private limited company operate through director’s personal bank account - Community Forum - GOV.UK

Key words are 'separate business account'. This doesn't mean it has to be a business bank account.

 

[Ozzy]

Key words are 'separate business account'. This doesn't mean it has to be a business bank account.

The reply given by that person on that Gov.uk post (ironically HMRC Admin) is not legally correct, but that doesn't surprise me.
Yes it is highly recommended, but no it is not a legal requirement. The comment that the money is the asset of the company is correct, but it is not illegal for someone to look after the company money on behalf of the company so long as it is correctly recorded and accounted for.

 

[ash799]

The reply given by that person on that Gov.uk post (ironically HMRC Admin) is not legally correct, but that doesn't surprise me.
Yes it is highly recommended, but no it is not a legal requirement. The comment that the money is the asset of the company is correct, but it is not illegal for someone to look after the company money on behalf of the company so long as it is correctly recorded and accounted for.

HMRC being ambiguous as possible with their replies, appreciate your insight guys, thank you

 

[eldertech24]

So what i need yo do to make this work, what do i need to ask to my accountant and my business partner in the UK, shall i close the LTD and open it with the majority of share to the business partner and i get in as a director with the minority of share, so he can open a business account for the LTD?regards

 

[fisicx]

If you are a director and you want access to the account you will need to complete all the checks. There is no way to get round this.

 

[eldertech24]

If you are a director and you want access to the account you will need to complete all the checks. There is no way to get round this.

could you be more specific please

 

[fisicx]

If you need to access to the bank account to need to prove you are a uk resident. The rules apply to anyone acting as a signatory.

If your UK partner has sole access to the bank account you might as well give them the whole business and they just transfer money each month to you.

But even that raises red flags as it looks like money laundering.

 

[eldertech24]

why, if i am part of the company and i put money in it and the business is legit, and i take money from it as payroll (this is what the accountant told me)which i will pay taxes on it, as i am in italy?

 

[fisicx]

Then your wages should be OK. But you won’t have any access to the bank account. That’s the important bit. Your UK business partner can do whatever they want without your knowledge.

 

[eldertech24]

and i am not good with that to be honest...

 

[fisicx]

and i am not good with that to be honest...

Which suggests this just isn't going to work for you.

I know there are companies that will work around the law to enable overseas residents to get UK bank accounts but I suspect the legalities of this are dubious. The banks are very risk averse and even a hint of dodgy activity could close you down in an instant.

 

[eldertech24]

Which suggests this just isn't going to work for you.

I know there are companies that will work around the law to enable overseas residents to get UK bank accounts but I suspect the legalities of this are dubious. The banks are very risk averse and even a hint of dodgy activity could close you down in an instant.

ok i got it, thanks for the infos

 

[Craiglincs]

You could get the partner to set up open banking that would let you see what is going on. Integrations with Xero/QuickBooks is quite common. But if they drained it all you could do is watch.

 

[eldertech24]

You could get the partner to set up open banking that would let you see what is going on. Integrations with Xero/QuickBooks is quite common. But if they drained it all you could do is watch.

yes we tried that but the banks in UK wants the director to be UK resident and have a 75% share and have controlle of the company, the fact is that i have to send money from italy to UK for paying the expenses and they might block the payments, i am sure there is some way to do this but my accountant is not tell me much just took the money to open the LTD, if someone here can help me that would be great. thanks

 

[NickGrogan]

If the other person is a director and owns 75% of the company, they can wait for you to fund the account and then fire you: no job, salary, or access to anything.

I believe that they can also issue more shares to dilute your 25% ownership to nothing or set up a different kind of share and then pay dividends to their shares only. Or they could also simply close the company.

All legally.

It would be quicker and easier to:

1) send all your money to this new director in the first place, or
2) go to a casino and put it all on red, or
3) just set fire to it.

You'll get the same result either way.

You could consider opening an Italian bank account in the UK business name. Passing the tests with Italian banks should be easier, and you'd then have full control.

 

[eldertech24]

If the other person is a director and owns 75% of the company, they can wait for you to fund the account and then fire you: no job, salary, or access to anything.

I believe that they can also issue more shares to dilute your 25% ownership to nothing or set up a different kind of share and then pay dividends to their shares only. Or they could also simply close the company.

All legally.

It would be quicker and easier to:

1) send all your money to this new director in the first place, or
2) go to a casino and put it all on red, or
3) just set fire to it.

You'll get the same result either way.

You could consider opening an Italian bank account in the UK business name. Passing the tests with Italian banks should be easier, and you'd then have full control.

so you re saying that i can have a UK business and a business account in Italy, because someone here said that the two business and bank account are separate entities right?

 

[NickGrogan]

The Limited company is a UK company, but there is no legal requirement for a UK company to have a UK bank account; in fact, there is no legal requirement to have any bank account at all.

A useful alternative to opening a UK account for your limited company is to open one in your country of residence. To do so, your company documents must be legalised. This process is called ‘apostilling’. You must obtain Apostille Certificates for these documents to confirm their authenticity.

Apostilled documents are accepted in all 105 countries that are parties to the 1961 Hague Convention.

You should be able to get this done for around £100-150

If you open an account with a decent sized bank they should be able to offer you multi currency accounts for Euros and Pounds, as well as Dollars if needed.

 

[fisicx]

so you re saying that i can have a UK business and a business account in Italy, because someone here said that the two business and bank account are separate entities right?

Yes they are separate entities. As @NickGrogan said - you don't need a bank account to run a limited company. It seems that your accountant has been giving you duff advice.

 

[eldertech24]

Yes they are separate entities. As @NickGrogan said - you don't need a bank account to run a limited company. It seems that your accountant has been giving you duff advice.

you mean you dont need a bank account in UK to run a LTD in UK, but i can have a LTD in UK and a bank account in Italy, con you confirm?do you know someone who did the same thing you mentioned?thanks

 

[fisicx]

you mean you dont need a bank account in UK to run a LTD in UK, but i can have a LTD in UK and a bank account in Italy, con you confirm?do you know someone who did the same thing you mentioned?thanks

Maybe, I have no idea if this is possible. HMRC may not be too happy. Best you ask them.

 

[eldertech24]

Maybe, I have no idea if this is possible. HMRC may not be too happy. Best you ask them.

ok i will thanks