Do you have a business idea, and are you interested in starting your own business venture? You have come to the right place! Our 4 step guide will walk you through the process of registering your business in the UK and advise you on how to avoid the most common pitfalls that could lead to your application being rejected.
1. Choose how you are going to run/operate your business
There are a number of options available to you in terms of how you could operate your business. Deciding on your company’s structure is a crucial first step into starting your own business.
- Sole Trader – You are the sole owner of the business, and you hold all liability for company debts. If you have decided to run your business as a sole trader, you won’t need to register it on Companies House. Register as a self-employed person for a self-assessment here.
- Limited company – According to Simply Business, a limited company has its own, separate legal identity even if the business is run by one person, who is acting as shareholder and director. Learn more about the advantages of each of the structures here.
Based on the Companies Act 2006 all private limited companies are required to appoint a minimum of one director and shareholder, which you will need to include in the application to open your business in the United Kingdom. All directors must be at least 16 years of age, read more about the requirements for company directors on the Companies House website.
Furthermore, once you have chosen your director/s and shareholder/s, the next part is to complete the Memorandum and Articles of Association.
- A Memorandum of Association is a legal document signed by all initial shareholders or guarantors agreeing to form the company.
- Articles of Association are a document containing written rules on how the shareholders or guarantors, directors and the company secretary are going to run the company.
For more information on Memorandum and Articles of Association, take a look at this gov.uk article.
2. Pick out your company’s name
Once you have decided on how your business will be run, you can move on to the next step – picking out your company’s name! Article by Companies House advises on checking if your company’s name is available via their company name checker. Extra tip: to ensure a successful application, make sure to circle back to the company name availability tool a few times throughout the registration process, as someone could have snapped the name whilst you were filling in the application!
Another factor to consider when picking out your business name is whether or not the chosen company’s name includes a ‘sensitive’ word – browse this comprehensive list of all sensitive words and expressions of the gov.uk website.
Lastly, double and even triple-check that your chosen company’s name is consistent throughout the application. Failure to do so can result in your application being rejected and, therefore, having to repeat the process.
3. Decide which address you are going to use as your main business address for Companies House
To register your business on Companies House, you must put down a physical address where HMRC sends you written communication. Please note that the address you register as your official business address will be publicly available via the Companies House website. To safeguard your home address, consider setting up your business at one of our 102 Virtual HQ locations across the UK. Find out more about rules for company addresses here.
4. Register your company on Companies House
Once you have ironed out all the details, it is time to register your business on Companies House. Alongside the business name and physical address, you will need to attach a Memorandum of Association, Articles of Association and shareholder details. In addition, to register your company in the UK, you will need to pay a £15 fee.
If all the documentation is correct and the application can be processed successfully, it usually takes about 24 hours for your business to be registered in the UK. Once the application has been processed and approved, you should receive a certificate of incorporation, which confirms that your business is officially registered in the UK.
According to a Companies House article, the certificate of incorporation is “conclusive evidence that the registration requirements of the Companies Act 2006 have been complied with and that the company is duly registered under this Act”. The certificate includes the company’s name and registered number, the date of incorporation, company type (private limited by shares) and, lastly, where the company’s registered office is based.
Final tip: for startups, we recommend exploring options to outsource some of your administrative work, so you have all time to focus on your business whilst drastically reducing initial overhead costs – take a look at our additional service offering.
You are all set to start your new business venture!