There’s never been a better time to have a business in the UK. In fact, the Companies House identified over 5.3 million registered companies in the UK as of March 2024. Considering the unlimited tax advantages, limited liability protection, and business credibility entrepreneurs enjoy, it’s no surprise that businesses are springing up by their numbers in the United Kingdom.
Although the benefits may be enticing, registering a company in the UK can be tricky. Fortunately, you can navigate this process seamlessly with the right information.
So, explore this guide to learn the crucial steps to register your UK company effectively in 24 hours.
1. Choose the Correct Business Structure
Legal company formation in the UK starts with choosing the correct business format. This isn’t just a strategy to make you appear professional but a requirement for company registration in the UK. This is because the government determines how to tax your organization fairly with this information.
In addition to fair taxation, choosing the ideal structure helps you get financial assistance from government or private institutions. For that reason, you want to carefully select from any of these options recognized by the UK government.
Sole Trader
The UK government recognizes a sole trader as someone who works for themselves or runs their company. You will still be recognized as a sole trader even if employed outside your business. This format is typically the easiest to start and simplest to run.
Business Partnership
In this structure, participants or “partners” share unlimited liability with the owning company. A “partner” can be an individual or a group. For instance, a limited company can partner with another company or business owner. Identifying a partner’s role sets the tone for registration.
When registering a partnership in the UK, you must select a company name and “nominated partner.” The “nominated partner” will be tasked with keeping the books and performing tax duties for the partnership. Only then can you register with the HM Revenue and Customs (HMRC).
Overseas Company
This business structure can be for companies with or without a base in the UK. However, the UK-based overseas company must register with the Companies House. Alternatively, the non-UK-based will only need to register with the HMRC for corporation tax registration.
Partnerships and unincorporated companies cannot register as a UK overseas company.
Social Enterprise
A social enterprise aims to support individuals and society at large. You can register a social enterprise as any of the following;
- Charitable incorporated company
- Limited company
- Sole trader
- Partnership
- Community interest company
- Co-operative
Unincorporated Association
An unincorporated association is an entity that a group of individuals sets up for non-profit reasons such as a football supporters’ club. This business structure is the only kind that requires no registration since it costs nothing to set up.
Although originally formed to make no profits, an unincorporated association may generate income from streams such as trading. If this happens, the association will file a company tax return and pay taxes.
That said, if you find it challenging to decide on the nature of your business, you can get help from the leading company offering UK company formation services. Such companies have a team of professionals who first understand your business requirements and then register in the most efficient way.
2. Name the Business
Choosing a company name is crucial to how you operate. However, your name choice is not entirely up to you; several factors may determine what you call your organization. Before choosing a name for your limited company in the UK, you follow certain rules.
First, avoid “sensitive” or offensive language and ensure your name is not the same as or similar to a registered company’s. The only way to be sure is to use the official company name availability checker.
Likewise, your registered name must be “Limited” or “ Ltd.” Alternatively, you must use “Cyfyngedig” or “Cyf” if registered in Wales.
3. Choose Company Representatives
When setting up a company in the UK, certain roles must be identified. For instance, you must choose a company director, while a company secretary may be optional. The duties of the company director include tax filing, record keeping, and reporting significant changes.
Besides a director, you will also identify the stakeholders, guarantors, and other individuals with “significant control” over your business. People with significant control over an entity usually have at least 25% shares or voting rights.
4. Identify and Prepare Incorporation Documents
Before incorporating your business, you must submit some vital documents for assessment. These documents contain personal information on the company stakeholders and the enterprise’s financial and accounting records.
In addition to personal and financial records, you must present the memorandum of association and articles of association documents. The memorandum of association is a signed legal statement by all stakeholders affirming the company’s establishment. Meanwhile, the articles of association list the rules for operating the business authorized by stakeholders, including the company secretary and director.
5. Register with the Companies House
At the final stage of incorporation, you must register your business with the Companies House. This sets your corporation tax process in motion unless your company is considered dormant.
A successful registration endeavor earns you a certificate of incorporation. This certificate displays your company registration number and formation date, indicating that you run a legal enterprise in the UK. This procedure typically takes 24 hours and is vital in notifying the HMRC of your future hiring endeavors.
Conclusion
Registering your company is the only way to run a legal entity in the UK. Not only does it save you from legal penalties, but it also helps you build trust among clients, stakeholders, and partners.
Despite the benefits, business registration can be tricky, even for UK residents. Thus, consider hiring an expert to speed up this process and enable you to maintain legal compliance.
