How to Register a Business?
Entrepreneurship has become one of the most common choices for people in the United Kingdom. Especially, some people get tired of their boring corporate jobs and they choose to start up with their own business ideas. So, if you have decided to start your own business but are confused, we will clear all your queries related to the setup of your business in the UK. In this article, we will guide you on how to get your business registered, the first step towards your journey.
Why Should You Think Of Getting Your Business Registered?
In the United Kingdom, the company is required to be registered to get legal recognition as a business. So, getting your business registered is an important part of initiating your business in a legal way. Hence, it is important for you to know all the steps about how to get your business registered legally. Moreover, the registration of a business ensures that the correct tax is being paid by the company. You are also required to get your business registered for various licences. The licences vary according to your business.
Which Type Of Businesses Need To Be Registered?
All types of businesses are required to be registered with the Her Majesty’s Revenues and Customs (HMRC). However, the procedure and the type of licences vary according to the business. For instance, it may vary if the business is employing or is non-employing. Also, in instances like if it is a home business or is located somewhere else. Overall, the procedure of registration depends on the size of the business and where you run your business from that is whether from home or from a rented place. It can also depend on whether the business sells online products or whether the goods are catered to users abroad. You can get advice from a legal advisor for detailed information on procedures according to your business type.
What Are The Basic Requirements For Getting Your Business Registered In The UK?
There are the same basic requirements for getting your company registered in the UK whether as a business partnership or as a Limited Company. However, if you want to register as a sole trader, there are no such requirements.
- Unique business name
- Business address
- Business Director and a Business Secretary (if any)
- Details of shareholders
- Details of PSCs
- Memorandum of Association
- VAT registration
How To Get A Company Registered As Sole Trader?
If you own a small business, your company is needed to be registered as a ‘Sole Trader’. Sole traders can also be considered self-employed. For this kind of registration, you require a National Insurance number. In this case, the sole traders have to ensure that they pay Income Tax and they are solely responsible for bearing any business loss. However, the sole traders do get a discount on business rates. It means that the business finances are interlinked to the personal finances of the owner.
What Happens When You Register As A Sole Trader?
If you get yourself registered as a sole trader, you have to be responsible for the following requirements.
- You have to keep the proper record of all the incoming and outgoing transactions. The owner is solely responsible for maintaining the accounts of his business.
- Ensure that you pay proper Income Tax according to the rate applicable on your annual turnover.
- Ensure that you are paying the business rate on the business property.
- If your annual turnover is above £85,000, it is compulsory to get your business registered for VAT.
How To Get A Company Registered As Business Partnership?
If the business is shared among two or more people, it is considered as a ‘Business Partnership’. In this case, the business partners are responsible for bearing any business loss. However, the tax varies according to the profit share of each of the partners. For this kind of registration, you are required to decide on a unique business name and the business must be registered as a trademark. Also, you have to choose a nominated partner responsible for filing the tax returns of the business. You must also register with VAT if your annual turnover is more than £85,000. Also, it is mandatory to register the business partnership before October 5 of the second tax year to avoid hefty fines.
How To Get A Company Registered As A Limited Company?
If you are registering your company as a Limited Company, it means that the company is a different entity of the business owner or business partners. Also, the business finances are separate from the individual finances. In other words, the loss or gain in the business is not interlinked to the sole responsibility of the business owner or business partners unlike the ‘Sole Trader’.
To get your business registered as a Limited Company, you are required to have a unique business name ending with Ltd, registration of the company as a trademark, nominating a company director, and a company secretary. Also, you must register the business location with the Companies House. Before initiating a Limited Company, you must also have a proper B2B business structure. It must also be noted that it is mandatory to register for corporation tax. This must be completed within three months of the company’s establishment.
Limited Companies are required to be registered with the Companies House. The registration can be completed via post or online. The requirements for the registration of your Limited Company with the Companies House are listed below.
- Business address
- Unique business name (No duplicate names are allowed)
- Details of the company’s shareholders
- Standard Industrial Classification (SIC) Code
- Memorandum of Association
- Details of Company’s Director
Conclusion
Getting your business registered is the first step towards your journey. We hope you find this article helpful in guiding you in the registration of your business. We have provided complete information regarding the registration of a business as a sole trader, business partnership, or as a Limited Company.
