People keep asking the question about how to register a business. Registering a business in the UK can be challenging, especially if you are not a European Union citizen. This guide covers all you need to know about how to register a business name in the UK, how much it cost to register a business name and the various forms of company structures.
How To Register A Business UK
How to register a business in the UK might be confusing. Starting your new business necessitates following a step-by-step procedure. It’s time to register your firm and “officially” enter your sector once you’ve completed the basic stages (knowing your business specialty, writing down your company goals, and so on).
You’ve decided to establish a business, which is awesome; but you still need to know how to register a business in the UK and how much it cost to register a business. But, before sales overwhelm you and your long-term business ambitions; you need to take a few easy steps to ensure that you get off on the right foot. Use the services of a seasoned formation firm that knows how to register a business name in the UK ; and can get your business up and running, letting you know how much it cost to register a business in the UK and running in as little as a few hours after receiving your online application
Steps to successfully registering a business in the UK
In the UK, there is a range of different business types, and you’ll need to pick the one that best fits your strategic planning.
The majority of businesses are established as sole traders, limited companies, or partnerships.
#1. Think of a Company Name
Your company is your treasure. As a result, you should choose a name that is relevant, appealing, and effective. Think long-term and be inventive. Check with Companies House to see if the name you want is available; and then purchase the internet domain as soon as you get formal approval.
#2. Decide What Type of Business You Will Be
Everything you need to do to start depends on the nature of the business you have, where you operate, and whether or not you hire people to assist you.
Technically, this is where you register. According to the official government website; you must register as one of the following, based on your location, type of business, and if you will be hiring individuals as employees:
- Sole traders
You can become a sole trader if you want to work as a self-employed person in the UK or run your own firm.
You can keep all of your business profits as a sole proprietor. To pay income tax and national insurance, you must meet your own obligations. All business debts are your sole responsibility.
It’s easier to start a firm as a sole proprietor, but you’re personally liable for your company’s debts. You’re also in charge of some accounting.
Although starting a business as a sole trader is relatively simple, you will be accountable for your company’s accounting and finances, including keeping track of your tax documents.
- Limited companies
If you form a limited liability company, your personal money must be kept separate from your business finances. You can hire an accountant to assist you with registering and managing your books.
This type of business is a legal entity independent of the people who operate it. Limited corporations must have at least one director and one shareholder; and must be registered with Companies House. The company’s stock cannot be traded publicly.
The funds of a limited business are independent of your personal finances, but there are additional reporting and management duties.
- Partnerships
This sort of business involves two or more individuals (or companies) forming a partnership and sharing responsibility equally. Profits are split evenly, with each partner paying tax on their portion and sharing debts and losses. This is a common structure for small firms.
A partnership is the most straightforward way for two or more people to run a company jointly.
This is the simplest way for two or more people to run a business together. You’ll have to share financial responsibility for the bookkeeping and debts of your organization.
You are jointly liable for your company’s debts. You’re also in charge of accounting.
Who Can Start a Business in the United Kingdom?
With the exception of citizens from Bulgaria and Romania, EU and EEA nationals do not require special authorization to start enterprises in the UK. However, because the United Kingdom is still discussing its exit from the EU, these laws may alter in the future.
You may require a visa if you’re from a nation that isn’t part of the EU or EEA. In the UK’s points-based immigration system, aspiring entrepreneurs can get preferential treatment, but you’ll have to follow a few regulations to get Tier 1 status.
How To Register A Business Name UK
It is compulsory to know how to register a business name, it is not necessary to register a business name if you are starting a business as a sole trader; but you must register for self-assessment with HMRC within three months of starting your firm. If you’re forming a limited company; you’ll need to register with Companies House, the UK’s company registrar. Even if you have no plans to form a limited company right now; it’s worth thinking about, because a limited company’s name cannot be similar to another company’s name; and you can protect your business name in the future. You might start an inactive corporation if you’re not ready to trade yet.
Take the following steps to register a company name once you’ve decided to form a limited company;
#1. Think of Your Company Name
Your company is really valuable. It’s something you’ll devote a lot of time, passion, and cash to, and you’ve probably already done so. Your company requires a name that is suitable, interesting; and effective in order to be successful. When considering this, be imaginative and consider the long-term viability of your company. Make sure the name you choose isn’t too similar to one already in use by another organization.
Keep an eye out for punctuation, special letters, and words that are used in company names in the UK. Avoid using sensitive words or terms that could be offensive or imply a link to the government or local authority. You require approval from the Department for Business, Energy; and Industrial Strategy (BEIS) to use “accredited” in your name, for example, and business owners who want to start a charity organization must register with the Charity Commission.
Check with Companies House to see if the name you want is available, and then purchase the internet domain as soon as you get the go-ahead.
#2. Register for an Office Address
You must register your company with a UK postal address in order to receive official notices and communications from Companies House and HMRC. This address must be in the same country as your company’s registration. You’ll need a Scottish address if you register in Scotland, for example.
It’s crucial to remember that when you register your address, it will be available for marketing companies and the entire public to see. You can register your residential address if you don’t have an office; such as if you work from home. Fortunately, reputable registered office address providers can assist you in keeping your personal and professional addresses separate. Not only does this provide security; but it can also boost your company’s image.
You’ll need to create an account with Companies House before you can register your firm (email address, name, and password). After that, input your company’s name and address.
#3. Choose a Business Activity
Select a “business activity” during the registration process. Simply put, this entails assigning at least one Standard Industrial Classification (SIC) code to your organization. A list of every SIC code accessible is available on the GOV.UK website, each with a unique five-digit number and an industry description. You can have up to four SIC codes per company, which you can modify later as your firm grows and diversifies.
#4. Appoint a Company Director(s)
You’ll need to appoint at least one company director once you’ve decided on your business activity. This person is legally responsible for the day-to-day operations of the firm, as well as the timely completion of reports and financial statements. It is not required to hire a company secretary, and the director must be at least 16 years old.
For each director, you must give two addresses:
- An official service address will be recorded and searchable in the public record.
- The address of your home will be kept private.
If the service and corporate addresses are the same, you must provide a different residential address. Remember to double-check that the nominal person has agreed to serve as a director.
Due to the fact that limited corporations are made up of shares, you must supply information regarding these shares during the registration process, which is referred to as a “statement of capital.”
You’ll need to list the number of shares in each category and their total value (the corporation has nine classes of shares to pick from). The aggregate share value of your firm, for example, will be £200 if it is made up of 200 ordinary shares with a nominal value of £1.
There is no limit to the number of shares you may distribute, and assign to each share. This can be as little as £0.01 or as much as £1. You can also specify which privileges each share has.
#6. Select a Person of Significant Control
You must have at least one shareholder because limited corporations are made up of shares. As the director, you may own the entire company, making you the lone shareholder with 100 percent ownership.
If a shareholder or subscriber owns more than 25% of the company’s stock, they are considered a “Person of Significant Control.” You’ll need to spell out the “details” of this control, such as who owns the shares, who has the ability to vote, and who has the capacity to nominate or remove the majority of the board of directors.
#7. Sign a Statement of Compliance
Since company formation is a legal procedure, you’ll want to double-check that you meet all of the Companies Act’s conditions for registration. You must also adopt the Memorandum of Association, which outlines the rules and procedures for operating a business.
It’s critical to double-check all the information, including how much it costs to register a business, before registering a company, since mistakes or failure to supply information might cause the registration process to take longer and present an early roadblock in your new business venture.
How Much Does It Cost To Register a Business
You must know how much it costs to register a business when starting one. Companies House is the cheapest way to register a business; it costs £20 and is payable to Companies House. Alternatively, for £50, you can get same-day registration. If you need witnesses for Form 12, it will cost you about £10. A complete price list is on the Companies House website for more information on how much it costs to register a business.
Do I need to register my small business UK?
Yes, in order to be legally recognized as a business in the UK, companies must be registered. You will need to register with Her Majesty’s Revenue and Customs (HMRC) at the very least to guarantee that you are paying your taxes on time and in the correct amount.
How much money is required to register a company in UK?
It will cost you at least £12 and can be paid with a debit or credit card. Your business will be registered within 24 hours. You must register by mail if you do not want to use the word “limited” in your company name.
