UK

Introduction In the United Kingdom, there is no official business type called “One Person Company” (OPC) like in India. However, UK law allows an individual to operate a limited company as the sole shareholder and sole director — this serves as the UK equivalent of an OPC. The UK is one of the most business-friendly countries in the world, allowing anyone (including non-residents) to form a company with just one person. This structure provides the limited liability, legal identity, and professional status that entrepreneurs and freelancers need. 1. What Is a One Person Company in the UK? In the UK, a One Person Company is simply a Private Limited Company (Ltd) run by one person who is both the director and the sole shareholder. The individual: This is fully legal and very common in the UK, especially among: 2. Key Features of a UK One Person Company Feature Description Type Private Limited Company (Ltd) Owner One person (director and shareholder) Legal Status Separate legal entity Liability Limited to the amount invested Registration Through Companies House Tax Corporation tax on profits Compliance Annual filings and accounts 3. Advantages of Registering a One Person Company 3.1 Limited Liability Your personal assets are protected. If the business faces financial issues or legal problems, your liability is limited to your investment in the company. 3.2 Legal Identity Your company is a separate legal entity. It can own property, open bank accounts, and enter into contracts in its own name. 3.3 Professional Image A limited company looks more professional to clients and investors than a sole trader business. 3.4 Tax Efficiency You can pay yourself via a mix of salary and dividends, which can be more tax-efficient than income tax as a sole trader. 3.5 Easy to Set Up and Run Forming a limited company in the UK can be done online in under 24 hours and costs just £12 via Companies House. 4. Disadvantages 4.1 Compliance You are required to submit annual accounts, confirmation statements, and possibly audit reports, depending on turnover. 4.2 Public Disclosure Your name, registered address, and company details are publicly visible on the Companies House register. 4.3 Accounting Complexity You may need an accountant to handle taxes, VAT, payroll, and other financial tasks. 5. How to Register a One Person Company in the UK Step 1: Choose a Company Name Use the Companies House name availability checker Step 2: Decide Company Structure You will be: Step 3: Prepare Documents You need: Step 4: Register with Companies House You can: Step 5: Get a Company Number and Certificate After approval, you will receive: 6. Taxation of a One Person Company in the UK Tax Type Description Corporation Tax 19%-25% on profits (depending on size) PAYE/National Insurance On salaries paid to yourself or employees Dividend Tax On dividends after corporation tax VAT Register if turnover > £90,000/year (2025 threshold) You’ll also need to: 7. Running the Business as a One Person Company As the sole director and shareholder, you are legally required to: Even though you are the only person involved, you must keep business and personal finances separate and comply with all legal obligations. 8. One Person Company vs Sole Trader in the UK Criteria Sole Trader One Person Ltd Company Legal Entity Not separate Separate legal person Liability Unlimited Limited Tax Rate Income Tax (20%-45%) Corporation Tax (19%-25%) Image Less formal More credible Admin Work Minimal Moderate to high Cost to Start None ~£12 registration fee Sole Trader is easier to manage, but Limited Company offers protection and tax advantages when profits grow. 9. Can Non-UK Residents Form a One Person Company? Yes! You can form a limited company in the UK even if you live abroad. Requirements: Many non-residents use formation agents or virtual address services to meet UK legal requirements. 10. Responsibilities of a One Person Company Director Even if you’re the only person in your company, you still carry legal responsibilities: Failing to meet these obligations can result in fines, penalties, or disqualification. Conclusion A One Person Company in the UK (i.e., a private limited company with one director/shareholder) is an excellent choice for freelancers, contractors, online sellers, and solo entrepreneurs who want the legal benefits of a limited company without needing partners or co-founders. It provides: While it involves more paperwork than a sole trader route, the legal and financial benefits often outweigh the extra administration — especially as your business grows.