ABOUT SCOTLAND

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

THE HISTORY: The existence and history of Scotland dates back centuries ago, when the arrival of Roman Empire members was documented (around the 1st century AD).  Britannia, once a Roman province managed to extend up to the northern side of the Antonine Wall, which during that era ran across central Scotland. Romans resulted to Hadrian’s Wall, after years of battles with the Picts, who were living in Scotland. Romans evacuated Scotland completely by the 3rd century.  After the third century many civilizations raided and settled in Scotland, including Gaels, Angles thereby creating also the Anglo-Saxon kingdom of Bernicia, which was later integrated into the northern English Kingdom of Northumbria.

 

Stories of Vikings, Norse raiders resulted into the Picts and Scoti to unite in the 9th century thereby creating the Kingdom of Scotland. Years after, followed by many successions and acts of war, the Kingdom of Scotland united with Great Britain.

 

Scotland later on evolved into one of the commercial, intellectual and industrial powerhouses of Europe, thereby enjoying a cultural and economic renaissance, with the assistance of the ongoing growth of its financial services sector, oil and gas and also its Parliamentary system.

 

 

THE CLIMATE AND TOURISM: Scotland enjoys a temperate climate, whilst being changeable on a constant degree, it still remains on normal levels.  It derives its warmth from its proximity to the Atlantic, whilst in the winter, spring and early summer, icebergs and freezing of the sea is not a rare feature. Scotland is not short of tourist attractions and sightseeing, whilst attractions such as the Falkirk Wheel, the Blair Drummond Safari Part, the Melrose Abbey, the Glasgow Cathedral and Glasgow’s Science Center remain in any tourist guide as favorite destinations for any visitor of Scotland.

 

 

DOING BUSINESS IN SCOTLAND: There are essentially three types of business entities in Scotland:

 

1. Sole Trader;

2. Limited Company; and

3. Business Partnership.

 

 

However the business structure can be changed, in the event the applicant, in due course, has found another structure which suits them more than the existing they have.  

 

The differences between the three are mainly focused on factors such as:

 

• The paperwork that is required to submit in order to commence business;

• Amount of taxes to be paid and managed;

• Personal liability in the event of a loss; and

• Profit making.

 

 

MAIN FEATURES & TAXATION:

 

SOLE TRADER: Used when acquiring the self-employed status; Staff can be employed, business profits may be kept after relevant taxes are paid off, and there is personal liability in the event of a loss.

 

Tax wise, a self-assessment tax return must be sent out every year to the relevant authorities, whilst income tax on the profit of the business and national insurance must be paid. In the event the expected annual profit is over £81,000 then registration for VAT is also required.

 

LIMITED COMPANY: Is used when the individual wishes to have the business bear the responsibility and have its personal finances separated from their own, which essentially means that any profit made by the business, belongs to the business and after the payment of corporate tax, the business can share the profits that were made.  Statutory accounts, annual returns, VAT registration, and company tax return must be made on an annual basis, whereas the director of a limited company must submit on an annual basis a self-assessment tax return and in addition pay tax and National Insurance.

 

A limited company, like all similar business entities throughout the world, has members (shareholders) and Directors (who may also be shareholders), whilst the Director may be subject to legal responsibilities for the running of the limited company.

 

Like all limited companies in similar commonwealth jurisdictions, a limited company can be:

 

• Limited by shares: Responsibility of the shareholder is limited to the value of shares that they have in their hands, but where not paid for.  Directors of a limited by Shares Company do not bare liability for the debts of the business, provided they did not act in a way that would essentially be interpreted as violating the law.

 

• Limited by guarantee: Responsibility of such a company’s directors or shareholders, bear full responsibility in financially and fully supporting the organization, in the event of a debt or miscalculation.

 

• Public limited company: Has the feature of being able to trade its shares in the stock exchange market. There is also the option of setting up a private unlimited company  as a different legal structure, however this type will impose all liabilities and debts on its director(s) and shareholder(s).

 

 

BUSINESS PARTNERSHIP: Entails essentially three basic types (i) Ordinary Business Partnership, (ii) Limited Partnership & Limited Liability Partnership, and (iii) Unincorporated Association.

 

• An Ordinary Business Partnership is when an individual and their business partner have direct and shared personal liability for the business, but also share the profits made by the partnership, provided the relevant tax for the profits is paid.

 

• Limited Partnership and Limited Liability Partnership has the feature of separating liability for business debts, the manner for which will depend on whether it is a Limited Partnership or a Limited Liability Partnership.

 

In the event it is a Limited Partnership, the liability of the partners differs between ‘general’ and ‘limited’. In ‘general, the partners bear personal liability for all the debts, whereas in a ‘limited’ the partners can be liable only up to the amount they at first invested in the business; general partners are the ones that are responsible for the management of the business. All the business profits may be shared between the partners; however each partner is obliged to pay the relevant tax on the share of their profit.

 

In the event it is a Limited Liability Partnership, the partners do not have personal liability for any debts of the business, yet their liability is limited to the amount they invested in the business, whereas the responsibilities and share in the profit of the business, can be found in the LLP agreement.

 

• The Unincorporated Association is the business which was founded on an agreement between a number of individuals, who came together with the aim of making a profit. There is no need for registration and there are no set up costs. However, the responsibility for any debts or filling in contractual obligations rests completely and directly on the individual members. In the event there is a profit out of this association, corporate tax must be paid and in addition, there will be also the requirement to submit a company tax return, in the same manner as if it were a limited company.