Being stuck in a routine of 9-5 isn’t everyone’s cup of tea. That’s why many start-ups and small businesses are running today and doing well. Several opportunities and ideas have taken shape and helped people become self-reliant in the UK.
However, before we get to that part, there are several things that an individual has to do before he establishes his business. Apart from handling the company’s finances, you also need to look into the legal aspects, so there’s no issue in the operation of your business. The first thing to look into is its registration.
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Do you need to register your business in the UK?
You must have seen several small businesses operating online. They just started from nowhere and aren’t even officially registered. This makes you wonder if writing a company is required. Well, it depends upon the type of business you are indulging in. If you are a sole trader, you don’t have to register your business but make sure you are paying your taxes on time.
What to do in the case of online businesses?
Since they will help you earn profit and make good money, they will have to be registered. The best part about having an online business is that it has a better reach than a traditional business. So, apart from registration, you will also need to establish a safe and secure payment system for your customers, and you will be all set to go.
To help you out in a better way, we have listed below what you need to do to register your business in the UK:
Select your company type
Regarding company types, there are a fair few to select from. Depending upon what your company’s future looks like, you can choose it to be a limited company, partnership company, sole trader, or overseas company.
Limited company
Limited companies are those companies made for profit but are separate entities from the owner. This is for those who don’t want to take many risks, as it will help them keep their assets different from the company. They have shares owned by shareholders, who share the profits and losses of the company.
Not-for-profit companies also exist under limited companies. These companies have guarantors, and the profit generated is reinvested in the company.
These are the most common types of companies in the UK and must be registered with the company’s house. They also include an ‘ltd’ or ‘limited’ as their suffix to separate it from the rest. There are two sub-categories under this:
- Private limited company:
These are those companies whose shares aren’t bought by the general public. The people in the company instead own them, and there’s no need for a minimum investment.
- Public limited company:
The only difference between a public and private limited company is how their shares are traded. If your company has a capital value of 50000 pounds or more, it is a public limited company.
Partnership Company
As the name suggests, a partnership company consists of two people who come together to do business. The partners involved participate in both profits as well as losses. There are three types of partnership companies:
- General partnership:
In this type of partnership, the profits and losses are shared equally. They must register with HMRC and nominate a partner who will file the company’s taxes while other partners file their tax returns.
- Limited partnership:
Here, the partners select one or more partners who overlook the company’s management. Other partners are involved in providing for finances, etc. they only share losses in the amount they have invested.
- Limited liability partnership:
This is a fair deal for those who don’t want to be held personally responsible for the losses incurred while doing any partnership. You also need to register with the company’s house for this partnership.
Sole Trader
A sole trader business is where you are your business and not a separate entity. You don’t have to register with the company’s house but need to register with HMRC for tax returns purposes.
Overseas Company
Ever wondered if you can operate a whole business in an overseas location? The answer to this is yes. All you have to do is to register the overseas company with the company’s house in the UK.
Register a business name
Naming one’s business is more complicated than you might think. The name shouldn’t already be in use, for starters. It is one of the most important steps to register a business in the UK. Also, depending on the type of company you want to operate, you have to select a suitable suffix.
Another thing you need to take care of while registering a name is to make sure the name isn’t offensive or too similar to an existing company. We are confident you wouldn’t want to face legal battles before starting. Also, certain words can only be used in a company’s title if you have permission from a higher authority. So, it is best to keep everything in check before making the final decision.
Select a business address
Just like you have a home address, your office must have its official address. That will appear on your registration papers and serve as your customers’ place of contact. Even if you are operating online, there needs to be an address where documents can be easily mailed.
Memorandum and articles of association
Two of the most important documents for businesses are memorandum and articles of association. No matter what type of company, it should have these two documents.
While a memorandum of association indicates the creation of a business and is signed when the business is registered, articles of the association consist of the company’s policies regarding how they want to run it. MOA cannot be changed or edited, so you must be careful while drafting it.
Get your SIC code
SIC code, or standard industrialization classification of economic activities code, is given to businesses to help them identify their business type.
Register your UK Business Bank Account
Having a business bank account helps in smooth transactions. For a limited company, they must do so. Partnerships and sole traders are recommended to do so. However, they don’t have to if they don’t want to.
Managing intellectual property
We all want to safeguard our prized possessions. It can be anything unique, and you wouldn’t want it copied and used without your permission. There are three ways to do that: Trademark, copyright, and patent.
All these things apply to different aspects of safeguarding one’s property but result in one thing: securing your assets/valuable possessions so that no one can use them without permission.