4 ms·

Interestingly, only a quarter of the businesses are employers in UK, so most of the company creation is presumably basically city of London financial engineerin

by sfifs 7y ago

Interestingly, only a quarter of the businesses are employers in UK, so most of the company creation is presumably basically city of London financial engineering :-)

sheeshkebab 7y ago
what's with justifying an existence of a company by having employees? If a company is profitable and you as an owner are doing well financially, does it really matter?
- DreamSpinner 7y ago
  I believe the general thought is that at a very simple level, operating as a company provides for a number of protections for the owners/operators. At a societal level, the broad justification for allowing unnatural beings with those benefits is that it still provides a net benefit to society through things like employment opportunities, taxes and the encouragement of economic activity. If the concept of a company no longer provides any non-trivial benefit to society (for example, no jobs or taxes), why should society collectively provide laws that allow them in the first place?
- KaiserPro 7y ago
  Shell companies are not the same as a person working as a "one man band" For example a company I worked for had a structure where the employees and customers (~250 employees and £50million turnover) were mostly interacting with the named company, but there were three other companies that "onion skinned" the company with the name. This was done to manage debt, primarily, which then allowed manipulation of taxes.
- michaelt 7y ago
  For reasons outside my area of expertise, UK companies sometimes divide themselves into numerous sub-companies. This produces the result that publicly traded company Tesco PLC has a great many sub-companies [1]. This is at odds with a lot of expectations about how companies are counted. [1] https://beta.companieshouse.gov.uk/officers/uZl4-qVGUWaBK3JdZy4zFMkg0Vw/appointments https://beta.companieshouse.gov.uk/officers/uZl4-qVGUWaBK3Jd...
  - pjc50 7y ago
    Tax is the usual one. That list also includes a lot of closed or dormant subsidiaries. Perhaps it's best to think of them as being like AWS VMs that get provisioned and de-provisioned, some with short lives. Tesco is complicated by takeovers that haven't been fully incorporated; I see a lot of familiar brand names in that list, and a whole other pile of fragments of Booker (giant wholesalers recently taken over) I tried https://beta.companieshouse.gov.uk/company/07530494/filing-history https://beta.companieshouse.gov.uk/company/07530494/filing-h... based on "EBT" in the name (tax shelter scheme), but it's a dormant empty shell. TESCO GREY (2LP) LIMITED https://beta.companieshouse.gov.uk/company/FC027196 https://beta.companieshouse.gov.uk/company/FC027196 registered in the Cayman Islands? Obvious tax shelter of some sort. Also closed.
  - dragonwriter 7y ago
    > For reasons outside my area of expertise, UK companies sometimes divide themselves into numerous sub-companies One of the common reasons for subdividing firms (in general, not particularly the UK) is to take advantage of liability limitations, which work as well for corporation as shareholder as for natural persons as shareholders. If it is less onerous to set up firms in the UK, you'd expect UK firms to do more of this, because the cost/benefit analysis would favor more of the cost is lower.
- deleted 7y ago
  [deleted]
KaiserPro 7y ago
Ah, yes, fortunately the source document where I got that stat from discounted all companies with no employees.
jdietrich 7y ago
1) It's very easy for a sole trader or freelancer to incorporate. There's a slight tax advantage to drawing dividends from a limited company rather than paying yourself a salary, so a lot of these one-man-band companies technically have no employees. 2) A UK limited company is a flexible financial wrapper for all sorts of organisations, many of which aren't businesses in the traditional sense. A significant number of community groups are registered as limited companies rather than charities, even if they are run on an entirely voluntary basis. 3) The extreme convenience of the British system and relatively favourable tax rates mean that a lot of foreign companies choose to incorporate in the UK, even if they have no presence there. Until the introduction of the mini-GmbH in 2008, many German small businesses chose to incorporate in the UK, because dealing with the cross-border issues was easier than dealing with German bureaucracy. If I were a startup founder based in a developing or middle-income country, my first impulse would be to open a UK limited company - it takes about 20 minutes, costs about £20 and gives you a sound basis to operate as an international business. 4) The annual returns for a small limited company are so straightforward that it's often easier to keep a company dormant rather than formally wind it up.

by sfifs 7y ago

Interestingly, only a quarter of the businesses are employers in UK, so most of the company creation is presumably basically city of London financial engineering :-)

sheeshkebab 7y ago

what's with justifying an existence of a company by having employees? If a company is profitable and you as an owner are doing well financially, does it really matter?

DreamSpinner 7y ago
I believe the general thought is that at a very simple level, operating as a company provides for a number of protections for the owners/operators. At a societal level, the broad justification for allowing unnatural beings with those benefits is that it still provides a net benefit to society through things like employment opportunities, taxes and the encouragement of economic activity. If the concept of a company no longer provides any non-trivial benefit to society (for example, no jobs or taxes), why should society collectively provide laws that allow them in the first place?
KaiserPro 7y ago
Shell companies are not the same as a person working as a "one man band" For example a company I worked for had a structure where the employees and customers (~250 employees and £50million turnover) were mostly interacting with the named company, but there were three other companies that "onion skinned" the company with the name. This was done to manage debt, primarily, which then allowed manipulation of taxes.
michaelt 7y ago
For reasons outside my area of expertise, UK companies sometimes divide themselves into numerous sub-companies. This produces the result that publicly traded company Tesco PLC has a great many sub-companies [1]. This is at odds with a lot of expectations about how companies are counted. [1] https://beta.companieshouse.gov.uk/officers/uZl4-qVGUWaBK3JdZy4zFMkg0Vw/appointments https://beta.companieshouse.gov.uk/officers/uZl4-qVGUWaBK3Jd...
- pjc50 7y ago
  Tax is the usual one. That list also includes a lot of closed or dormant subsidiaries. Perhaps it's best to think of them as being like AWS VMs that get provisioned and de-provisioned, some with short lives. Tesco is complicated by takeovers that haven't been fully incorporated; I see a lot of familiar brand names in that list, and a whole other pile of fragments of Booker (giant wholesalers recently taken over) I tried https://beta.companieshouse.gov.uk/company/07530494/filing-history https://beta.companieshouse.gov.uk/company/07530494/filing-h... based on "EBT" in the name (tax shelter scheme), but it's a dormant empty shell. TESCO GREY (2LP) LIMITED https://beta.companieshouse.gov.uk/company/FC027196 https://beta.companieshouse.gov.uk/company/FC027196 registered in the Cayman Islands? Obvious tax shelter of some sort. Also closed.
- dragonwriter 7y ago
  > For reasons outside my area of expertise, UK companies sometimes divide themselves into numerous sub-companies One of the common reasons for subdividing firms (in general, not particularly the UK) is to take advantage of liability limitations, which work as well for corporation as shareholder as for natural persons as shareholders. If it is less onerous to set up firms in the UK, you'd expect UK firms to do more of this, because the cost/benefit analysis would favor more of the cost is lower.
deleted 7y ago
[deleted]

KaiserPro 7y ago

Ah, yes, fortunately the source document where I got that stat from discounted all companies with no employees.

jdietrich 7y ago

1) It's very easy for a sole trader or freelancer to incorporate. There's a slight tax advantage to drawing dividends from a limited company rather than paying yourself a salary, so a lot of these one-man-band companies technically have no employees. 2) A UK limited company is a flexible financial wrapper for all sorts of organisations, many of which aren't businesses in the traditional sense. A significant number of community groups are registered as limited companies rather than charities, even if they are run on an entirely voluntary basis. 3) The extreme convenience of the British system and relatively favourable tax rates mean that a lot of foreign companies choose to incorporate in the UK, even if they have no presence there. Until the introduction of the mini-GmbH in 2008, many German small businesses chose to incorporate in the UK, because dealing with the cross-border issues was easier than dealing with German bureaucracy. If I were a startup founder based in a developing or middle-income country, my first impulse would be to open a UK limited company - it takes about 20 minutes, costs about £20 and gives you a sound basis to operate as an international business. 4) The annual returns for a small limited company are so straightforward that it's often easier to keep a company dormant rather than formally wind it up.