Starting a new company is a big step toward turning your dreams into reality. In the UK, company registration is a simple process, but you’ll need to get the details right. Whether it is a small business or a limited company, the right approach ensures recognition and legal formation, meaning the business is set to operate.
To ensure recognition and legal formation, we have put together a practical guide that covers the key steps to register a new company in the UK.
1. Decide on Your Business Structure
Before you register, the company is required to settle on a business structure to register under. Below are the most common options in the UK;
- Sole Trader – Offers simplicity and flexibility; however, you fully shoulder financial obligations.
- Partnership—Business responsibility is shared by two or more individuals.
- Limited company—Offers more protection as a legal entity; personal assets are protected from business risks and liabilities.
Formation of private limited companies (Ltd) is preferred by the majority of entrepreneurs due to limited liability, credibility, and easy access to finances.
2. Choose a Company Name
Your business name is your branding; select it wisely. In addition to your selection, the name should also meet the requirements of Companies House.
- The name must not already be registered.
- It must not be harmful or misguiding.
- Some specific words (“Royal” or “Bank”) need prior authorization.
You can search the availability of a name using the Companies House online tool prior to registration.
3. Assign one or more directors and a company secretary.
A limited company should have one director as a company head who is responsible for guiding the company and its activities for utmost compliancy.
- A company director must at least 16 years ol0064.
- A company secretary is optional for private limited companies but required for public companies.
This information is submitted to Companies House.
4. Set Shareholders and Share Structure.
Each limited company has to have a minimum of one shareholder. A shareholder of a company is one of the owners of the company who is entitled to receive dividends as per the shareholding proportion.
- At minimum one share must be issued for every shareholder.
- You can define, however you want to define, the hierarchy of how the profits can be shared and the votes can be controlled by providing a company different classes of shares.
Your business plans should be in sync with this structure for the business in the long run.
5. Create significant documents.
Memorandum of Association—This is a legal contract issued to all initial shareholders by the company, which they have to sign, agreeing to the formation of a company.
Articles of Association—Stipulated rules that govern the format of the company’s management to include meetings and duties of the directors.
You can either use standard model articles created by Companies House or tailor bespoke ones designed specifically for your business.
6. Register with Companies House
Now, it’s time to register your business officially. There are two ways to register your company:
- Via the Companies House website—this is usually completed within 24 hours.
- By post—using form IN01, this option may take longer (up to 10 days).
The standard registration fee is £12 for online registration and £40 for postal registration.
You can register your business and are required to submit the following:
- Company name and address (registered office must be in the UK).
- Director and shareholder details.
- Share capital information.
- Memorandum and Articles of Association.
Once approved, you are issued a Certificate of Incorporation, and your company is registered with the law.
7. Register for Corporation Tax
You must register with HMRC for corporation tax within three months of starting activities for your business.
This ensures you can report profits, file tax returns, and pay the appropriate required tax. Failing to register and do this on time may lead to the business being penalized.
8. Consider Additional Registrations
Depending on your business, you may also need to register for:
VAT—if your business surpasses the VAT threshold turnover of £90,000 (as of 2024).
PAYE (Pay As You Earn) is useful when you want to employ staff.
Self-assessment is applicable when you’re a sole trader or a company director with other earnings.
If you do these registrations early on in your business life cycle, you will not have to deal with compliance headaches later.
9. Create a Business Bank Account
A business bank account enables you to separate your personal and business finances, which is the only option for limited companies. It simplifies bookkeeping, filing taxes, managing cash flow, and much more.
10. Create an Accounting and Record-Keeping System
Create a system to track your company’s finances because UK companies have to track the following:
- Financial transactions.
- Assets and liabilities, including any loans.
- Invoices, receipts, and contracts.
An accountant for small businesses or online accounting tools can make sure you stay compliant with tax authorities and streamline your workflows.
In Summary
Starting a company in the UK is a straightforward process but requires thoughtful strategy, adherence to regulations, and order for it to be successful. Choosing the business model, gathering the necessary paperwork, and incorporating are the first steps to establish your company and strategy.
After registration, it is essential to maintain accurate records, observe tax deadlines, and focus on scaling your business confidently. In the UK, your new company has the potential to expand and flourish in the competitive landscape with the right strategy.