How to register business in United Kingdom

Last Updated on July 1, 2024 by admin

Both United Kingdom citizens and Citizens of other countries can register a business in the UK, even if they’re not UK residents.Most businesses register in UK are either as a sole trader, limited company or partnership

Weather you into Online businesses or brick-and-mortar businesses you may need to register your business in United kingdom depends on your type of business which could be a sole trader, limited company or partnership.However, If you’re a sole trader, registering a business name isn’t actually compulsory

If you’re self-employed and earning more than £1,000 a year, you will have to register with HMRC as a sole trader that you pay tax through Self Assessment. You’ll need to file a tax return every year.. but If your annual profit is over £30,000, you’ll have to register as a limited company.

Also read:How to register a business name in New Zealand

Steps on to Register/ set up a Business in the UK

Setting up a business in the UK involves several steps, which vary depending on the type of business structure you choose (sole trader, limited company, partnership). Here are the general steps:

1. Choose Your Company Type:

• Sole Trader: This is the simplest structure, where you are personally responsible for your business’s debts.
• Limited Company: This is a separate legal entity from you, meaning your personal assets are protected.
• Partnership: This involves two or more people sharing responsibility for the business.

2. Register a UK Business Name:

• Check the availability of your chosen name with Companies House (for limited companies) or with your local council (for sole traders).
• Ensure your chosen name complies with UK naming regulations.

3. Choose an Official Address for Your Business:

• This address will be listed on public records and used for official correspondence.
• Consider using a registered office service if you don’t want to use your personal address.

4. Memorandum and Articles of Association (for limited companies):

• These documents outline the company’s purpose, structure, and rules.
• You can use standard templates or draft bespoke documents.

5. Get Your Standard Industrial Classification (SIC) Code:

• This code identifies what your business does and is required for registration.

6. Register Your Business:

• For sole traders, register with HMRC for Self Assessment.
• For limited companies, register with Companies House.
• For partnerships, register with HMRC for Self Assessment and create a Partnership Agreement.

Additional Considerations:

• Business Bank Account: Open a business bank account to separate your personal and business finances.
• Licenses and Permits: Check if you need any specific licenses or permits to operate your business.
• Insurance: Obtain appropriate insurance coverage for your business.
• VAT Registration: Register for VAT if your turnover exceeds the threshold.

How to register for Sole traders in uk

To register as a sole trader in the UK, you need to do the following:

1. Check if being a sole trader is right for you:

   • Understand the responsibilities and liabilities of being a sole trader.
   • Ensure it is the right business structure for your needs.

2. Choose your business name:

   • Check if your chosen name is available and complies with UK naming regulations.

3. Register for Self Assessment with HMRC:

   • This is how you will report your income and expenses to HMRC and pay your taxes.
   • You can register online through the government website or by post.
   • You will need to provide your personal details, National Insurance number, and details about your business.

4. Keep records of your income and expenses:

   • You are legally required to keep accurate records for tax purposes.
   • These records will help you complete your Self Assessment tax return.

5. File your Self Assessment tax return and pay your taxes:

   • You must submit your tax return by the deadline each year (usually 31 January for online returns).
   • You will also need to pay any taxes owed by the deadline.

Additional steps you may need to take:

• Register for VAT: If your turnover exceeds the VAT threshold, you will need to register for VAT and charge VAT on your goods or services.
• Inform other government departments: You may need to inform other government departments about your business, such as your local council or the Health and Safety Executive.

How to register for Limited companies in uk

To register a limited company in the UK, you need to follow these steps:

1. Check if a limited company is right for you:

   • Understand the responsibilities, legalities, and potential benefits of forming a limited company.
   • Consider seeking advice from a professional if needed.

2. Choose a company name:

   • Ensure your chosen name is available and complies with UK company naming rules.
   • Check the Companies House register to see if your chosen name is available.

3. Appoint directors and a company secretary (optional):

   • You need at least one director, who will manage the company’s affairs.
   • A company secretary is optional but can help with administrative tasks.

4. Decide on shareholders or guarantors:

   • You need at least one shareholder or guarantor, who can also be a director.
   • Shareholders own a share of the company and have a say in how it’s run.
   • Guarantors guarantee to pay the company’s debts if it can’t pay them itself.

5. Prepare documents:

   • Memorandum of Association: This document sets out the company’s name, registered office address, and objects.
   • Articles of Association: These rules govern how the company will be run. You can use model articles or create your own.
   • Statement of Capital and Initial Shareholdings: This document details the company’s share capital and who owns the shares.

6. Register your company:

   • You can register online through the Companies House website.
   • You will need to provide details about the company, its directors, shareholders, and registered office address.
   • You will also need to pay a registration fee.

7. Register for Corporation Tax:

   • You can usually register for Corporation Tax at the same time as you register your company.
   • If not, you will need to register separately with HMRC after your company is registered.

8. Additional steps:

   • Open a business bank account.
   • Check if you need any licenses or permits to operate your business.
   • Consider professional indemnity insurance to protect your business.

Read: How to register a business in Canada -What you need to know

How to register for Partnerships busines in uk

Registering a partnership business in the UK is a fairly straightforward process. However, it’s important to understand that there is no formal registration process like there is for limited companies. Instead, the partnership is registered for tax purposes with HM Revenue and Customs (HMRC).

Here’s a breakdown of the steps involved:

1. Choose a ‘nominated partner’: This person will be responsible for managing the partnership’s tax returns and keeping records.

2. Register the partnership with HMRC: The nominated partner needs to register the partnership for Self Assessment with HMRC. This can be done online through the government website or by post using form SA400. You’ll need to provide the following information:

   • The partnership’s name (either your own names or a chosen name)
   • The nominated partner’s details
   • The nature of the business
   • A business address
   • The details of each partner

3. Register each partner for Self Assessment: All partners, including the nominated partner, need to register individually for Self Assessment if they haven’t already. This can also be done online or by post using form SA401.

4. Keep records and file tax returns: Each partner must keep records of their income and expenses for the partnership and file an annual Self Assessment tax return. The nominated partner will also need to file a partnership tax return.

Additional Considerations:

• Partnership agreement: While not legally required, it’s highly recommended to create a partnership agreement. This document outlines the rights and responsibilities of each partner, how profits and losses will be shared, and what happens if a partner leaves or the partnership dissolves.
• Business bank account: Opening a separate business bank account is advisable for managing the partnership’s finances.
• Insurance: Consider obtaining appropriate insurance coverage for your partnership.

Registering for VAT

You must also register for VAT if your VAT taxable turnover is more than £85,000. You can choose to register if it’s below this, for example to reclaim VAT on business supplies

How to Set up a limited company in uk

Setting up a limited company in the UK involves several steps. Here’s a breakdown of the process:

1. Choose a company name: Ensure your chosen name is available and complies with UK company naming rules. You can check availability on the Companies House website.

2. Appoint directors: You need at least one director to manage the company’s affairs. Directors can be individuals or corporate entities.

3. Appoint a company secretary (optional): While not mandatory, a company secretary can help with administrative tasks and ensure compliance with legal requirements.

4. Decide on shareholders or guarantors: You need at least one shareholder or guarantor. Shareholders own a share of the company and have a say in how it’s run, while guarantors guarantee to pay the company’s debts if it can’t.

5. Prepare company documents: These include:

   • Memorandum of Association: Outlines the company’s name, registered office address, and objects.
   • Articles of Association: Rules governing how the company will be run. You can use model articles or create your own.
   • Statement of Capital and Initial Shareholdings: Details the company’s share capital and who owns the shares.

6. Register your company: You can register online through the Companies House website. You’ll need to provide details about the company, its directors, shareholders, and registered office address. There’s a registration fee involved.

7. Register for Corporation Tax: You can usually register for Corporation Tax at the same time as you register your company. If not, you’ll need to register separately with HMRC after your company is registered.

8. Additional steps:

   • Open a business bank account.
   • Check if you need any licenses or permits to operate your business.
   • Consider professional indemnity insurance to protect your business.

How to Register your company in UK

To register your company in the UK, you will need to follow these steps:

1. Choose a company name: Ensure the name is available and complies with UK company naming rules. You can check availability on the Companies House website.
2. Appoint directors: You need at least one director to manage the company’s affairs.
3. Appoint a company secretary (optional): While not mandatory, a company secretary can help with administrative tasks and ensure legal compliance.
4. Prepare company documents: This includes the Memorandum of Association, Articles of Association, and Statement of Capital and Initial Shareholdings.
5. Register your company: You can register online through the Companies House website.
6. Register for Corporation Tax: This can usually be done at the same time as company registration.
7. Open a business bank account: This is necessary for managing company finances.
8. Check for licenses and permits: Depending on your business activities, you may need specific licenses or permits to operate legally.
9. Consider insurance: Professional indemnity insurance can protect your business from potential liabilities.

FAQS

Q1: What are the different types of business structures I can register in the UK?

A1: The most common business structures in the UK are:

• Sole Trader: Simplest structure, where you’re personally responsible for your business’s debts.
• Limited Company: A separate legal entity, protecting your personal assets.
• Partnership: Two or more people share responsibility for the business.

Q2: How do I register as a sole trader?

A2: You need to register for Self Assessment with HMRC and inform them you’re self-employed. You’ll need your National Insurance number and details about your business.

Q3: How do I register a limited company?

A3: You need to register with Companies House. You’ll need a unique company name, details of directors and shareholders, a registered office address, and documents like Memorandum and Articles of Association.

Q4: How do I register a partnership?

A4: The nominated partner registers the partnership for Self Assessment with HMRC. Each partner also needs to register individually for Self Assessment.

Q5: Do I need a business bank account?

A5: It’s highly recommended, especially for limited companies and partnerships, to separate your personal and business finances.

Q6: Do I need any licenses or permits?

A6: It depends on your business activities. Check with your local council or relevant authorities for specific requirements.

Q7: When do I need to register for VAT?

A7: If your turnover exceeds the VAT threshold (currently £85,000), you need to register for VAT and charge it on your goods or services.

Q8: What taxes do I need to pay?

A8: It depends on your business structure and income. Sole traders pay Income Tax and National Insurance, while limited companies pay Corporation Tax. Partnerships pay Income Tax and National Insurance on their share of the profits.

Q9: Can I get help with registering my business?

A10: Yes, you can seek professional advice from an accountant or solicitor, especially for complex structures like limited companies.