Regulations

A UK Economic Interest Grouping (UKEIG) operates under a specific set of legal and regulatory rules that shape how it is formed, governed, and managed. These regulations are designed to balance flexibility with accountability, enabling members to collaborate effectively while maintaining oversight and public transparency.

While UKEIGs retain many of the features of their European predecessors (EEIGs), they are now governed solely under UK domestic law, primarily through the Companies (UK Economic Interest Grouping) Regulations 1989, as amended by post-Brexit legislation. These rules establish the framework within which UKEIGs must operate.

Legal Framework

The key legislation covering UKEIGs includes:

  • Companies (UK Economic Interest Grouping) Regulations 1989 (SI 1989/638)

  • The European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2018

  • Companies Act 2006, in areas where it applies by extension

  • UK competition law, including the Competition Act 1998 and Consumer Protection laws

These laws govern the formation, operation, obligations, and dissolution of UKEIGs. Members must also observe relevant tax, employment, and health and safety legislation depending on the activities undertaken by the grouping.

Formation and Registration

UKEIGs must be registered with Companies House before they can operate legally. The formation process includes submitting:

  • Form EE IG01 – Application to register the grouping

  • A formation contract, signed by all members

  • Notification of the official UK address and details of managers and members

Once registered, the UKEIG receives a registration number and becomes a legal entity in its own right.

The UKEIG must use its full name, including the designation “UKEIG”, on all formal communications, contracts, and legal documents.

Legal Personality

A UKEIG is a body corporate with separate legal personality. This means it can:

  • Enter into contracts

  • Own property and assets

  • Employ staff

  • Sue or be sued in its own name

However, this corporate status does not limit the liability of its members. All members remain jointly and severally liable for the grouping’s debts and obligations.

Purpose and Activities

By law, a UKEIG must exist solely to facilitate or develop the economic activities of its members. It cannot:

  • Operate with the aim of making profit for itself

  • Engage in commercial activities independently of its members

  • Hold interests in another company unless doing so directly supports the grouping’s function

Typical permitted activities include coordination, support services, joint representation, shared infrastructure, or collaborative research.

Staffing Limitations

A UKEIG may not employ more than 500 persons. This rule prevents the grouping from evolving into a full-scale operating business, and reinforces its nature as a collaborative support structure rather than a trading entity in its own right.

Financial and Tax Rules

UKEIGs are fiscally transparent. The grouping itself does not pay corporation tax on profits. Instead, any income or losses are passed through to the members, who are responsible for declaring them on their own tax returns, according to their legal and tax status.

UKEIGs must also:

  • Register for VAT if applicable

  • Maintain accurate financial records

  • Submit an annual return to Companies House

Unlike limited companies, UKEIGs are not required to file annual accounts with Companies House, though they must keep internal financial records for accountability and compliance.

Public Disclosure and Notices

Certain changes must be notified to Companies House and, in some cases, published in The Gazette, such as:

  • Appointment or removal of members or managers

  • Changes to the registered address

  • Dissolution or winding-up notices

These disclosure requirements are part of maintaining a clear public record of the grouping’s structure and accountability.

Competition and Consumer Protection

UKEIGs must comply with UK competition law and consumer protection regulations, particularly where their activities involve coordination across multiple businesses or sectors.

UKEIGs must not:

  • Fix prices or divide markets

  • Abuse a dominant position

  • Enter into anti-competitive agreements

Even though UKEIGs are not-for-profit entities, they may still come under scrutiny if their structure results in market distortion or unfair advantage.

Liability and Risk

One of the most significant regulatory features of a UKEIG is the joint and several liability of its members. This means:

  • Each member is individually responsible for all debts and obligations of the grouping

  • Creditors can pursue any member for the full amount owed

  • Liability may continue even after a member leaves, for obligations incurred during their membership

To manage this risk, many UKEIGs implement internal agreements, indemnity clauses, and insurance policies to protect members.

Dissolution

A UKEIG can be dissolved voluntarily by its members or compulsorily through legal action. Common reasons include:

  • Completion of its intended purpose

  • Irreconcilable disputes between members

  • Insolvency or legal non-compliance

Dissolution must be notified to Companies House and may require settlement of debts, final reporting, and public notice in The Gazette.

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