How to Start a Business
UK Business Guide: How to Start a Business
To set up a private limited company you need to register with Companies House, known as incorporation.
Starting a business requires research, planning and preparation. Once you know what kind of business you want to start, there are several steps to take to get off the ground.
Having a compelling business idea is just the beginning. Turning that idea into a business in the UK is a long journey, but well worth the roadblocks you may find along the way. This guide will be your map as you learn how to start a business.
Step One: Choose a Company Name
The first step is choosing your company name. If you already have an idea of your business name, you need to make sure it's not registered to a new company. You can check this with the Companies House register.
Your name must usually end in either 'Limited' or 'Ltd'. You can include the Welsh equivalents 'Cyfyngedig' and 'Cyf' instead if you registered the company in Wales.
Having a name that is similar to an existing business can be an issue as well. Companies House will contact you after registration if your business name is too similar to an existing one, or offensive.
Step Two: Set an Official Address
You must have an official company address in order to register your UK business where communications can be sent. The address must be:
Your company address will be made available in the register.
Step Three: Appoint a Company Director
Your business is required to have at least one director who is responsible for preparing and managing company accounts. In order to be appointed a director, you must meet the following requirements:
Directors can be companies, but one director must be a person. The director does not have to have a UK address. The director will also be legally responsible for the company.
Step Four: Determine Shareholders
Some UK businesses have shareholders, who own certain rights to the company and can vote on changes or additions. If you choose to set your company up to have shareholders, you must set the price of your individual shares.
Setting shares needs to be included in your statement of capital when you register your UK business. The information about your shares that is required includes:
Step Five: Arrange Legal Documents
There are additional documents needed to register your UK company.
The memorandum of association is a legal statement required for registration, signed by directors and shareholders agreeing to form the company. The articles of association are rules for running the company written by the shareholders and directors.
Once you register your business, the memorandum can't be updated. You can find memorandum templates here and sample articles of association here.
Step Six: Register Your Business
You can register your business in the UK with HM Revenue and Customs (HMRC) as a sole trader, limited company or partnership:
You also need your SIC code to register, to identify what your company does. You can find your SIC code here.
You can register online if your company is limited by shares. It costs £12 and your business is usually registered within 24 hours.
You can also register by post using form IN01.
Postal applications take 8 to 10 days and cost £40. You can be registered on the same day if you:
Your envelope must be marked "same day service" in the top left-hand corner.
Once the company is registered you'll get a "certificate of incorporation". This confirms the company legally exists and shows the company number and date of formation.
Step Seven: Register for Corporation Tax
All UK businesses must register for corporation tax within 3 months of being registered. You'll need your business's 10-digit Unique Taxpayer Reference before you register for Corporation Tax online.
This is sent to your company address by HMRC, usually within a few days of your business registration. In order to register for corporation tax, you need:
Once you receive your tax deadline, you will use this date to file your company tax returns annually.
In addition to setting up your business in the UK, you will need a marketing plan, accounting services, and possibly a storefront. Here's where writing a business plan will help guide your first steps after starting your business.