US LLC or UK Ltd: which company fits your business?

For founders outside the US and UK, these are the two structures we're asked about most. Both can be owned by non-residents, and both can be set up without travelling. They work differently, though, and the better choice depends on your business, not on which is cheaper this month.

The US LLC

A US limited liability company is formed in a single state, such as Wyoming, Delaware or New Mexico. Every LLC must keep a registered agent with an address in its state of formation, which is why this is one of the places we work with licensed registered-agent providers.

• Popular with Amazon US sellers, Shopify stores serving American customers, and software or digital-service businesses.
• After formation, the company applies to the IRS for an EIN, its federal tax number, which banks and payment providers ask for.
• Each state has its own annual report or fee requirements, and foreign-owned LLCs have federal information filings. Missed filings carry penalties, so plan for them from the start.

The UK private limited company

A UK Ltd is registered with Companies House and must have a registered office address in the UK and at least one director.

• A common choice for selling to UK and European customers, and for consultancies and trading companies.
• Directors and people with significant control must verify their identity with Companies House.
• Every year the company files a confirmation statement and annual accounts, and registers for UK taxes as its activity requires.

Questions that decide it

• Where are most of your customers?
• Which marketplace or payment provider do you need, and does it support your nationality and country of residence?
• Will you have partners, and how will profits be shared?
• Who will handle annual filings and accounts?

Tax treatment depends on your own country of residence as well as on the company, so get advice from a qualified tax professional before you decide. In a consultation we go through these questions with you and recommend a structure, with every fee listed in writing.