To start a business, you’ll also need to make sure it’s registered. This can be done in several ways, in order to suit the needs of your firm. Here, we’ve provided a professional guide on how to register a business in the UK, your responsibilities when you do, and the benefits that come with registering your company name.
Table of Contents
Register a Company Name
Registering a Trademark
Ways of Registering a New Business
There are several ways to register a business in the UK. Most will normally register as a sole trader, a partnership, or a limited company.
How to Register as a Sole Trader
To register as a sole trader, you’ll need to tell HMRC that you pay tax through Self Assessment, and file a tax return every year.
Setting up a business as a sole trader is the simplest solution for any firm, but it also means that you (the owner) will be personally responsible for your company’s debts and any losses it makes. You’ll also have some accounting responsibilities. This is because sole traders are counted as being self-employed, running their businesses as individuals.
You’ll need to register as a sole trader if any of these statements apply:
You’ve earned more than £1,000 from self-employment over the course of a tax year
You need to prove that you’re self-employed, for example, if you need to need to claim Tax-Free Childcare
You want to make voluntary Class 2 National Insurance payments to help you qualify for benefits
When you’re registered as being a sole trader, you’ll be able to keep the profits made by your business once you’ve paid tax on them. Being a sole trader also means you have to follow a specific set of rules on running your business, right down to how it can be named.
How to Register as a Partnership
When you register your business as a partnership, you’ll have to register with HMRC but you’ll also be required to choose a nominated partner.
In a partnership, you’ll share responsibility for your firm’s debts, but split the profits between you. You’ll also be fully in charge of paying your own tax on your share of the company. Your nominated partner will be responsible for managing the partnership’s tax returns and business records.
A partnership can often prove beneficial if you’re looking to set up a business, because choosing partners who bring unique skills to the table can turn your firm into a well-rounded team. They may also be able to offer your business a larger amount of financial support as well.
How to Register as a Limited Company
To set up a limited company, you will have to register your business with Companies House as well as HMRC.
When you register your business as a limited company, it will be classed as a separate legal entity. This also means that your personal and business assets will be separate as well.
You’ll also need to provide some additional information to register as a limited company:
Your company name
Your registered office
At least one named director of your business
Details of shares, and at least one shareholder
Your Standard Industrial Classification (SIC) code, as this determines the nature of your business
All shareholders in your business need to agree and sign a memorandum and articles of association. You’ll need to make sure this is done even if there is only one shareholder, as it states your agreement to run a business and sets out the rules for how your company should be run.
After this, the final step will be to register for corporation tax, which you should do within three months of starting to trade.
If you double up as a shareholder for your company, you can choose to pay yourself a smaller salary but pay dividends from company profit. Because dividends are taxed in a different way to salaries, this may result in you paying less tax overall.
You may also be relieved to note that any significant debt, charges, or claims made against your company will not affect your personal assets.
How to Register a Company Name for Your Business
There are three things you need to do in order to register a company name for your business in the UK. To begin, you must check that the name you want for your firm hasn’t already been taken. By starting with Companies House’s name-checking tool, you’ll be able to see if the ideal name for your firm has already been taken.
If it hasn’t, and if it isn’t too similar to any current company name, you’ll be able to click a link to register a “private limited company online”. You cannot reserve a name for your business.
You will also need to make sure you have supporting evidence, which involves supplying three pieces of personal information about yourself and your shareholders. These may be:
Your or their town of birth
Your or their mother’s maiden name
Your or their father’s first name
Your or their telephone number
Your or their National Insurance Number
Your or their passport number
You will then have to fill out an online questionnaire, in which you will have to:
State whether this is a new company or if you are taking over another busines
Confirm whether any company directors or “persons with significant control” are on the Companies House secure register
Create a Government Gateway user ID
State if the company will be a “Community Interest Company”
Give the company’s registered office address
Say when the company will start trading
Appoint a company director or directors
State whether or not your company has a “Person with Significant Control”
Decide on your share structure
Sign a statement of compliance
Companies House’s fee for registration is £12 when you apply after 3pm. Once you’ve paid, your company will normally be registered within 24 hours.
If you need to register your business immediately, the fee will be an additional £100 on top of the £12 registration fee. This must be done before 3pm.
Post applications to register a company name will take eight to ten days and cost £40.
The Benefits of Registering a Company Name
You won’t need to register a company name if you are operating as a sole trader. However, there are a number of benefits that come with registering as a limited company and registering a company name. These benefits include:
Paying lower tax, as we have described above
Giving you limited liability, as you are regarded as a separate entity to your business. This means you won’t be responsible for any financial loss made by your firm
Giving you a more professional image, as many corporations prioritise limited companies over sole traders when choosing suppliers
Making it easier for you to borrow money and raise finance
Being able to sell equity in exchange for funding
Being able to make tax-free contributions towards employee pensions
Making it easier for you to pass on ownership of your business when you retire, or in the event of your death
While you don’t necessarily need a trademark for your business, it is a good idea to have one registered. This ensures that only you have rights to your company name, and prevents similar brands from encroaching on what you’ve already established. A registered trademark is also an asset that holds its value, and can be sold to a buyer in the future.
If you do plan on selling your business, having a registered trademark also assures your buyer that they can continue to trade with the current business name.
To apply for a trademark, start by searching for current trademarks at the Intellectual Property Office and follow the links after this.
Your Responsibilities as a Business Owner
Depending on what your business does, you may have further responsibilities to take into consideration. It will be down to you to check whether you need:
Licenses or permits, such as those needed to play music, trade in the street or sell food Insurance
There will also be sets of rules for you to follow if you are planning on:
Selling goods online
Buying goods from abroad, or selling goods abroad
Storing or using personal information
You’ll also need to check up on potential rules and regulations if you’re planning on setting up your business from home, or renting a property to run your business from.
If you buy or rent a property, you may have to pay business rates. Small businesses and new ventures that are just starting out can apply for discounts on this, however, and some may pay nothing at all. If you’re registered as self-employed, you may also be able to claim some things as expenses, including property and equipment.
Hiring People for Your New Business
You’ll also have responsibilities if you’re going to become an employer, take on agency workers or freelancers. If you’re only hiring the latter, these responsibilities will mainly be based around health and safety.
These responsibilities grow if you’re looking at employing people, including:
Paying for their National Insurance (you can claim an allowance to reduce the bill)
Providing workplace pensions to eligible staff members
Are You Looking for Premises for Your New Business?
If you’re looking at starting a business but still need to find that ideal location that keeps your employees comfortable and is bound to impress any potential clients, renting an office space in the heart of London might just be the solution you need.
Contact us today and we’ll be happy to set you up in a space that suits all your needs, giving you plenty of room for any equipment and always offering you the opportunity to find new premises as your business grows. Your business may only be on its way to being registered, but it could soon be flourishing within our walls.