ACCA Advanced Taxation (ATX) Practice Exam

What does it mean for a company to be established in the UK?

1. It must be registered in the UK

2. Its headquarters are in the UK or has a fixed place of business

3. It must have a majority of UK shareholders

4. It must operate in the UK for at least 5 years

The correct answer is: Its headquarters are in the UK or has a fixed place of business

For a company to be established in the UK, having its headquarters in the UK or maintaining a fixed place of business is a fundamental indicator of its presence and operational base. This means that the company either conducts its primary activities within the UK or has a designated location where it manages its functions, engages in business, and makes decisions regarding its operations. This concept of "establishment" is significant in various legal and tax contexts, as it ties into the jurisdictional reach of UK laws on taxation, regulation, and compliance. Simply being registered in the UK does not necessarily denote establishment because registration could encompass entities that do not actively operate in the country. Similarly, the ownership structure, such as having a majority of UK shareholders, does not alone define where a company is established. Duration of operation, such as existing for a minimum of five years, is also not a requirement for being recognized as established. Therefore, having a headquarters or a fixed place of business directly links the company's presence to its operational activities within the UK, making this choice the most accurate depiction of what it means to be established in the country.