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How To Register
a Business in the UK: 2024 Guide

  • Modified: 28 January 2024
  • 11 min read
  • Starting a Company
How To Register
a Business in the UK: 2024 Guide
  • Author Jon Mills

    Jon Mills

    Business Writer

    Jon relishes writing content that both educates and entertains the reader. With a background in copy and content writing for brands, he's told unique stories in creative ways, adding value to products in the luxury sector. Now, he works with our accounting experts and small business owners to bring their advice and journeys to life for Osome's readers. He aims to inspire ambitious entrepreneurs to set their sights high, and build highly-respected, flourishing businesses.

When the government introduced the Companies Act 2008, it brought with it a swathe of changes to corporate law and the steps to take to register a business. These reforms included allowing companies to be formed online and simplifying how companies were set up. As such, many professionals now use an online registration service to form their new business.

If you are considering setting up your own business in the UK but don't know where to start, starting the registration process should be your first step. It can help protect your intellectual property rights and give you access to financial services, such as loans and insurance coverage, which are otherwise unavailable to unlicensed or unrecognised businesses.

Here's a detailed guide on how to register your business in the UK that will simplify your journey.

Why Should I Register a Business in the UK?

The UK has a stable business environment. The country has strong links with the rest of the world, making it a popular destination for domestic and foreign investors and those looking to register a business.

First, businesses need to register with HMRC to be considered legitimate, which means that if you sell goods and services, you have to have a business registration number to run your operations.

You can register your business in the UK by filling out a simple online form (most people can register for Corporation Tax at the same time as registering with Companies House, just to hit two birds with one stone). Once approved, you will receive a unique business number that can be used for all of your dealings with HMRC (Her Majesty's Revenue and Customs).

Besides, there are some other reasons why you should register business activities in the UK, such as:

  • To enjoy the benefits of starting your venture: Many people choose to start their businesses because they want to set their hours and have a more flexible schedule. However, you can only run a licensed business with an official government-issued registration number. By registering your business, you can operate legally and avoid penalties from HMRC for potentially illegal practices, such as tax evasion or selling fake goods online.
  • To avoid the risk of fines: You should ensure that you register your business within three months of its inception. This allows the HMRC to check if they need to investigate your company further before they start levying penalties on you and/or taking legal action against the company owner(s).
  • To protect your business against fraud: In the event of a scam or fraudulent activity, the law can only protect you and support you in your quest for justice if your company is recognised as being legally valid by the government.

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Which Business Structure To Choose for Registering

Before you register a company, you need to determine which type of business it will be. Each type of business has advantages and disadvantages, but they all have certain legal requirements. Let's look at the three types of different business structures the government allows you to register as.

Sole Trader

A sole trader is someone who runs their own business and gets to keep all their business profits following income tax. This means that the person owns all of the assets and liabilities of their business, including the right to decide how the business will be run. The main benefit of running a sole trader is setting your hours and controlling what happens in your business. However, a sole trader is personally liable for all the business's debts.

Although businesses run by sole traders need to be registered just like other types of businesses, they may operate outside the normal regulatory framework due to their limited resources. However, the sole owner is responsible for organising all company accounts and business records unless they outsource to an expert accounting provider.

You can register a business as a sole trader if your business profits from self-employment exceed £1,000 by the end of the financial year. If you fit the bill, here's what you need to do to list your business as a sole trader:

  • Keep a record of your accounts
  • Invest in good insurance
  • Pay income tax on your profits
  • Register for VAT if your turnover is more than £85,000
  • Assemble the paperwork before registering a business

Partnership

A partnership is an agreement between two or more people to share profits, losses and other rights in a business venture. A written contract forms partnerships usually called a partnership agreement or partnership deed, which sets out how profits and losses will be shared between owners during the term of the agreement.

If you want to register a Limited Liability Partnership in the UK, you must register it with the HMRC. Once registered, partnerships are legally binding agreements between partners that allow them to protect all the parties involved by law.

Here's how to register your business as a partnership:

  1. Ensure that you fulfil the minimum requirement of having at least two people in the partnership.
  2. Brainstorm a business name and ensure that it is unique. You can use our company name check tool to ensure your prospective company name hasn't already been taken. As a general rule of thumb, consider choosing a name that any other business in the world hasn't used. This will help you have a global appeal should you expand to other parts of the world. Also, ensure that your name doesn't violate the guidelines and is free of offensive words. Once you have a registered company name, you can move on to the next step.
  3. Determine who will be the ‘nominated partner.'The nominated partner is legally responsible for filing your Corporation Tax returns, while the other partner will be responsible for sending their own individual tax returns to the government.
  4. Register for VAT if the annual turnover exceeds £85,000.

Limited Company

A limited company has limited liability and at least one shareholder, meaning it is independent of your personal assets (personal and business assets are separate). And it has to be registered with the Companies House to be a separate legally recognised entity.

Limited companies also offer limited liability to the shareholders, which means that in a financial crisis, neither the owners nor the shareholders are personally responsible for paying off the company debts or liabilities — part of the conditions of being a separate legal entity.

Another benefit when you register a business as a limited company is that you are only liable to pay off a debt that is equivalent to your initial investment. So, let's say you invested £10,000 when starting your limited company — as your company grew, you garnered £30,000 in liabilities and debt. In the event of a financial failure, your limited company would be liable to pay only £10,000 because that's how much you started with. It won't matter if you have personal assets worth enough to pay off the company's debt, making the business independent.

Once recognised as a separate legal entity by the Companies House, limited companies can trade, buy or sell assets, borrow money, take on other people's debts, distribute to its members, pay dividends and offer company shares to interested buyers. They can also become legal employers to help grow the business, which means increased responsibility, such as managing payroll and paying for employee National Insurance. However, you can claim an allowance to reduce your tax bill by providing workplace pensions to eligible staff.

To register your business as a limited company, you must:

  • Choose the type of limited company you want to be recognised as.
  • Select a unique business name that doesn't violate copyright or offend anybody.
  • Have your documents ready to go before submission to Companies House. You can either do it yourself or work with a company formation agent or accountant with relevant experience and expertise in registering a new business.
  • Once you receive your company registration number and the Certificate of Incorporation, you can register for VAT(Value Added Tax) if your turnover crosses £85,000 for the financial year.

How Do You Register a New Business With HMRC?

This applies to sole traders, limited companies, and a private limited company: the first step to registering a business in the UK is to start with the government site. This will allow you to set up business bank accounts, directorships and company status.

You must register your company as soon as possible after setting up your business (ideally within the first three months of starting operations) to avoid tax penalties, pay national insurance contributions, and file accounts with HMRC.

You will be required to complete an online form on the UK government website, which will take about an hour to complete. But before you proceed, make sure you read up on the terms and conditions as well as the eligibility criteria that apply to you.

Once you have set up an account, it is time to fill out the necessary paperwork. You will need to provide the following information about your business to complete the registration process:

  • The business name
  • Official company address (where it will be based)
  • Your contact details – including email address and telephone number
  • Your business structure – this may include whether your company is a sole trader, limited company or partnership
  • Your team, including the information on the directors, secretaries and shareholders

Once you complete the registration process, you will receive a UTR(Unique Taxpayer Reference) via post, which will not only legitimise your registered company but can also be used to protect your business by law.

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Small Business With HMRC

Small business owners must register for VAT and pay tax accordingly to HMRC. You must complete the company registration process within three months of setting up your business, or you could be fined. The penalty starts at £100 and may exceed £1,600, depending on how long you pay it off.

Tip

And if you are wondering how to register such types of businesses, know that the registration process for small businesses is the same as it is for other types of companies and business structures, whether a limited company or sole proprietorship.

Registering a Business at Companies House

Registering a Business at Companies House

Companies House is the UK's official registrar of companies. It acts as a central repository for all information about companies, including their names and addresses, directors' details and financial information.

Registering a business is a process that can vary depending on the type of business you are starting. You will need to decide how you want to be identified, as well as whether you want to be taxed and if so, how. The application process is quite flexible, so you can register your company effortlessly if you understand how it works.

First, you must choose a unique company name that doesn't violate any copyrights or is offensive. It is a good idea to check what names are available before choosing one, as there are strict rules in place regarding names that can be registered (for example, a private limited company must not include the word 'limited liability partnership').

Once you have chosen your business name, get your paperwork in order. This includes the Memorandum of Association (MoA), Articles of Association (AoA), and Form IN01. You will also be required to submit other documents to Companies House, including:

  • A signed original statement from both parties that states that they are entering into a contract
  • Proof of address for all parties
  • A copy of each party's last known address
  • A copy of each party's full legal name
  • Your SIC (Standard Industrial Classification) code
  • A named and appointed company director with the relevant identity documents

Once your documents are approved, Companies House will provide you with the Certificate of Incorporation, which will instantly legalise your business in the UK.

Get Your Business Started With Osome

There is a lot of information and advice out there on business registration in the UK. But the entire process is easier said than done. So, if you are overwhelmed with the thought of registering your business, consider partnering with professionals like us.

Osome is a company formation and business bank account opening platform that helps you set up your company, register it and prepare its financial foundation. We will guide you through every step of the way so that you know exactly what to do to become a legal company in the UK.

Our online service offers business services to individuals and small businesses who want to start their dream ventures with expert advice. From a free company name-checking tool to VAT registration, our solutions are end-to-end, so you don't have to stress or look elsewhere for support when registering your business.

The best part? Our service is completely online, so there is no need to worry about paperwork or filling out forms. It is paperless throughout, even if you are a non-resident. With our expertise, we can help you get your legal documents in order to save you stress and time so that you can focus on growing your business and watching those revenues grow.

Author Jon Mills
Jon MillsBusiness Writer

Jon relishes writing content that both educates and entertains the reader. With a background in copy and content writing for brands, he's told unique stories in creative ways, adding value to products in the luxury sector. Now, he works with our accounting experts and small business owners to bring their advice and journeys to life for Osome's readers. He aims to inspire ambitious entrepreneurs to set their sights high, and build highly-respected, flourishing businesses.

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FAQ

  • Do I need to register my business in the UK?

    Yes, in the UK, most businesses must register with HM Revenue and Customs (HMRC) for tax purposes, even if you're a sole trader or self-employed. Additionally, if you operate as a limited company, you must register your company with Companies House.

  • How much does it cost to register a small business in the UK?

    The cost of registering a small business in the UK can vary depending on the business structure and services you require. Registration for sole traders or partnerships with HMRC is generally free. Registering a limited company with Companies House typically costs around £12 online, or you can pay more for same-day or paper registration services. There may be additional costs for legal or financial advice.

  • How do I start a business from home?

    Starting a small business from home in the UK involves several steps, including choosing an idea, a business name, business registration (if required), creating a business plan, securing any necessary licenses or permits, setting up a dedicated workspace, managing finances, and marketing your business. It's essential to research and plan thoroughly to ensure a successful home-based business.

  • Do I need to register a sole trader business?

    If you operate as a sole trader in the UK, you must register with HMRC for self-assessment tax purposes. Registration is necessary for sole traders to report their income and expenses for tax calculation and payment. However, registering as a sole trader is relatively straightforward and can be done online, and there is no fee for this registration.

  • Do I need a business address?

    Whether you are a non-resident or a local, it is a legal requirement to have an official address for your company in the UK when starting out your journey as a business owner. You can select whether this will be your home address, an office, or the address of your accountant. In order to run a legitimate UK business, consider registering a virtual office address through a provider like Osome.

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