How To Register A Business In the UK
Have you started your own business?
Before you take your new venture to market, it’s important to consider company registration.
Registering your business and setting up a company is a great way to present a professional image to customers and receive limited liability protection. Not only are tax advantages appealing, but registering your business can result in better business financing.
Are you ready to register your new business? Learn everything small business owners, entrepreneurs and tradespeople need to know about registering companies in the UK on the My New Venture platform.
Choose A Company Structure For Your Business
It’s important to consider which company structure best suits your business. As a business owner, your company set-up has a direct influence on day-to-day operations, your taxes, and your personal risk.
Company structures for entrepreneurs and tradespeople may differ but selecting which business structure you will use is a crucial initial step in your business journey. Before selecting a structure, it’s vital to research and recognise which business structure will help you in the long run.
Whether it’s registering a limited company or a sole proprietorship, we’ve explained the most common below.
Sole Trader
This business structure means you have complete control over your business’s operation. As the sole owner, it can simplify your tax reporting, however, you are personally liable for all financial obligations. This is the ideal structure for you if your business is a low-risk, home-based or retail business because starting up is easier and doesn’t require government fees.
It is free to register as a sole trader in the UK.
Here are the sole trader legal requirements you should know:
Record all your expenses and sales
Pay income tax on your profit and the national insurance rates that apply to you
Register for value-added tax (VAT) if your turnover is > £85,000
Pay any business rates that may be applied to the property you operate from
Include your name and business name on all official paperwork
Partnership
Partnership refers to two or more people that own and operate a business. This is a great way to minimise financial burden by dividing overhead costs and expenses. Combining the knowledge and expertise of two individuals boosts your business’s ability to grow, by having a second opinion for decisions, ideas, and innovations.
Here are the partnership legal requirements you should know:
Register a nominated partner
Choose a business name
Include your name(s) and business name on all official paperwork
Register for VAT if your turnover is > £85,000
Limited Liability Partnership (LLP)
The major dissimilarity between a partnership and a limited liability partnership is that an LLP is a legal entity on its own. The primary difference is legal ownership; a partnership shares legal responsibility and has an equal role in the actions and finances of the business. Debts and losses will then be divided within the partnership.
An LLP is a corporate body that exists independently from its members. The major advantage is protection from liability for losses. Selecting an LLP for your business structure protects your personal assets and can result in favourable tax advantages.
Limited Company
A limited company is either limited by shares or limited by a guarantee. Under UK law it must be registered at Companies House and operate within the Companies Act 2006.
Setting up a limited company minimises your personal liability and heightens the professional status of your business. Along with being tax-efficient, legitimately paying less personal tax than a sole trader, you will possess a separate legal identity. This means that as a business owner of a limited company, you’re protected from any debts the company may incur.
Here are the limited company legal requirements you should know:
Pick a company name – limited company names must end in “Limited” or “Ltd”
Choose a trading name, which can be different
Nominate a business address
Appoint at least one director
Appoint a company secretary if you wish
Decide on shareholders
Draw up ‘prescribed particulars’ outlining your business structure
Create a ‘memorandum of association’ – a legal declaration in which all shareholders agree to start the limited company
Create ‘articles of association’ – the rules about how the company will run, as agreed by all shareholders and directors
Register for corporation tax within 3 months of starting
Choose a Name for Your Company
One of the first steps when registering your business is ensuring your company name is available. The selection process for choosing a company name must begin by ensuring it does not already exist on the UK companies register.
To avoid this, ensure you carry out research in your industry and avoid names that are similar or may cause offence.
Picking a name for your company should be meaningful, straightforward, and easy to market. Always remember to keep your customer in mind, steering clear of long and complex names.
Registering With Companies House
Did you know that Companies House is the UK’s executive agency for the registrar of companies?
Companies House is the government body that processes your business information to register as a company. The set-up process varies and depends on your type of business, your location and employee status.
Here is a breakdown of the registering process:
- Select your business structure
- Unique company name
- Company formation package
- Company information
- Allocation of shares
- Memorandum and Articles of Association
- Submit to Companies House
Find everything you need to set up your business through Companies House here.
Certificate of Incorporation
Unsure what a certificate of incorporation is?
The COI confirms your company’s name, registration number, date of incorporation and location of registration (e.g., England and Wales, or Scotland). These details will be added to the Companies House register, which is available to the public.
It acts as conclusive evidence that your company registration complied with UK legalisation and that it is legitimately registered. You can order certified copies of certificates and documents held on the Companies House register here.
Top Registration Tips for Small Businesses
Make a mark in your industry by registering your new venture. As a business owner, it’s always good to make business processes as hassle-free as possible.
Here’s our top tips for fulfilling the registration process:
Start your registration process early on in your business journey
Determine if your new business meets all the requirements
Ensure your choice of business structure suits your needs and wants
Select a company name that effectively reflects your vision and brand
Accurately fulfil all the requirements and documentation needed for a smooth registration process
Opt for an online application, this can help speed up the process
Where To Get Help Registering a Business
Starting a new business can be daunting, that’s why it’s vital to ask for help and advice when you feel you need it.
With the right expert and professional guidance, you can easily get your business off the ground and UK registered. Legal help can come in various forms to assist on your road to the registration office.
Unsure who to talk to about setting up a business? Here are our top resources to make registering your business that little bit easier:
- A business solicitor: Do you need immediate help setting up your business? A business solicitor can help, from choosing the right business structure to agreements and business premises. Although there is no legal requirement for you to use a solicitor, this is a great way to ensure your business is creditable from the get-go.
- Trusted advisor services / accountant: this form of expert help taps into the expertise of fully accredited and certified accountancy firms. If you’re struggling with setting up your business, you can trust professional advice from individuals who know the best way to help.
- A business mentor: not only can a business mentor help you actualise ideas for growth but share their expertise and skills from personal experiences. Tap into a wealth of knowledge and contacts by seeking help from a business mentor. The good news is that you can access free or paid-for mentors on the GOV.UK website here.
- Online at GOV.UK: by following the straightforward online steps, you can register online and access a wealth of help and support. Access government-backed schemes here.
