Whether you live in the UK or are a foreigner seeking to do business in the UK without living here, there are various ways to set up a company and make yourself official. Fortunately, you can form a new company in less than one working day. Determine your goals and the appropriate company structure to get started.
How to Register a Company in the UK (Company Structure and Formation Guide)
There are three basic formats a UK company registration can take –
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All of them are suitable for different business types, so choosing the right one is the first step towards registering a company.
Register as a Sole Trader
Also known as a sole proprietorship, it is a type of business with one owner. You can trade under your name or use a business name as a sole trader. It is the simplest business structure in the UK and may suit freelancers or other solo entrepreneurs.
You can register as a sole trader if you’ve earned more than £1,000 from self-employment in the last tax year - (6 April of the last year to 5 April of the current year). Register by 5 October of your second tax year of business.
To register as a sole trader, enroll for self-assessment and class 2 national insurance through their business tax account if your profits exceed the £6,725 threshold. You’ll need a government gateway ID and password to access the account.
However, registering for self-assessment is different from registering a sole proprietorship. It allows you to report your income, including self-employment income, to HMRC.
Set Up a Limited Company In the UK
In most cases, registering a company requires at least one director and shareholder for the business to become a separate legal entity with distinct rights. You can be a sole company director and shareholder of your own business. You can also add more directors and shareholders in the future if you decide to expand your company.
Compared to other company incorporation UK formats, a limited liability company has more compliance requirements, which come with added benefits, including protecting your personal finances in case the business encounters financial difficulties or fails. If you want to take the hard work out of officially forming your business, consider using our company set-up service and save yourself the extra effort. It is a simple two-step method where you order online, and we contact you for the necessary information to swiftly and securely register your company with Companies House.
Types of UK LTD companies you can form include —
Limited Liability Partnerships (LLPs)
A limited liability partnership has at least two members (people or a company known as a corporate member) coming together to own and run the business jointly. Even though all the members have equal rights over the business, the law requires that at least two of them be designated as responsible for ensuring compliance with statutory requirements.
The partners must register for self-assessment since the LLP does not pay corporation tax, but each member is taxed on their share of profits as a self-employed individual. However, the members are not liable for debts if the business fails to pay.
To register, you’ll need an acceptable business name, a registered address in which your principal place of business will be publicly available, two designated members, and an agreement that outlines how the LLP will be run. Once you have the requirements, you can register your LLP with Company House. Leverage Your Virtual Office London LLP registration service for a swift and affordable process.
Set Up a Private Limited Company (Limited By Shares of Guarantee)
A company must either be limited by guarantee (CLG) or shares (LTD). An ltd is a profit-making business owned by shareholders with certain rights. The corporation is divided into shares, each assigned a nominal value, which reflects the initial face value of the shares, which may or may not align with the actual market value.
CLG, on the other hand, is for a non-profit, such as a social enterprise, charity, association, or club, owned by members who act as guarantors of the company's liabilities, and each member undertakes to contribute an amount specified in the articles in the event of insolvency or the winding up of the entity. It does not have shares or shareholders.
To set up an LTD company online, you’ll need to choose a name according to Companies House rules. Next, you will need to appoint the company officers, which typically include directors, with the option of appointing a company secretary. You will also be required to give the names of the shareholders, who may also be company directors. Articles and memorandum of association are essential because they document how you intend to run the entity. Lastly, Companies House requires that you register an official address and choose a SIC code that identifies what your company does.
Setting up a UK CLG requires that you submit the following company documents —
- Check that your preferred company name is available;
- Have at least one guarantor (individual or corporate body) and director;
- A constitution that contains elements of articles and memorandum of association;
- A registered office address in the UK that will be publicly available;
- Names of the persons with significant control;
- Statement of compliance that -
- Outlines the nominal amount (often a small sum, such as £1) that each subscriber will pay as their guarantee;
- The statement of guarantee that details the circumstances under which a guarantor will be required to pay their guarantee and
- A SIC code.
How to Choose Your Company Name
Once you decide to register a new business, use the checklist below to get the name right —
- Confirm that the name is not too similar or identical to an existing company name.
- Your preferred company name should not suggest any connection to the UK government. Avoid using words such as “Royal,” “Her Majesty,” or “Crown.”
- The name should not be offensive or inappropriate in any way.
- It should not suggest criminal activity or any undertaking contrary to the interest of the public.
- Unless you have relevant permission, avoid using words like “Chartered” or “Architects” that are likely to mislead the public as to the nature of your business or credentials.
Read also: Top 21 Best Small Business Apps to Manage Your Daily Operations
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Contact Your Virtual Office London, UK's top rated company formation agent, if you need to register a new company. We offer a comprehensive set of company formation packages, which include everything you need to get your company up and running.
Other extras included in the package above are —
- Fast Online Formation
- UTR Number
- Digital Certificate of Incorporation
- Digital Articles of Association
- Digital Share Certificates
- £25 Cashback with Wix
- Bank Referral
- Free .co.uk Domain
- Free Accountant Introduction
- Fully Compliant with AML and KYC Regulations
See also: Your HMRC UTR Number Explained
FAQs
How much money is required to register a UK company with Companies House?
Register a UK company and start your journey right with a bundled package of just £39.99, which includes a UK registered office address, a free .co.uk domain, and an accountant introduction. We provide exceptional value for those keen on commencing their business without additional office space expenses and initial staffing requirements.
See also: Directors Service Address Vs. Registered Office Address Service
Can anyone register a new company in the UK?
Registering a new company for UK and non-UK residents takes up to 6 hours to form a company. All you need to do is determine the type of company you want to establish, think through an appropriate business name and contact us. We will help you put together all the necessary documents you need to set up an LTD.
How to register a holding company in the UK?
In the UK, the term ‘holding company’ is used to describe a company that holds the shares of other companies. A common way to register a holding company is to incorporate it as an LTD through the following steps:
- Think through a unique name for you and register it with Companies House. Until 2015, using the word “holding” or “holdings” in a company name was considered sensitive by Companies House, but it is now acceptable.
- Register an official business address and select an appropriate SIC code.
- Appoint directors and a company secretary. You must appoint a director, but you do not have to appoint a company secretary.
- Identify people with significant control (PSC) over your company—for example, anyone with voting rights or more than 25% of the shares.
- Prepare a memorandum and articles of association describing the company will run.
- Form your company.
After you’ve set up the holding company, transfer the ownership of your subsidiaries' shares and assets to it.
Can I own a business in the UK as a foreigner or non-UK resident living outside of the UK?
Yes, foreigners and non-residents can open a company in the United Kingdom without needing a VISA. There are no restrictions based on nationality. However, you’ll need to comply with the following legal and administrative requirements before you are cleared to start.
- Choose a proper business structure that best fits your business goals;
- Register your business with Companies House to a UK address; and
- Get the necessary permits or licenses.
Once your business is registered, please note the following —
- The corporation registered to a non-resident is liable for UK tax obligations.
- A UK resident director is not a mandatory requirement, but it is recommended for operational convenience.
- While not legally required, having a UK bank account is advisable to enhance business credibility.
- You can use a family or friend's address as your registered office or opt for a central London virtual address for added privacy.
Do I need a business bank account during the company registration process?
No. You do not need to open a business bank account, but you’ll likely find it impossible to operate without one. We understand that most British high-street banks can make it difficult for the new entrepreneur to open an account with company credit checks and multiple other requirements that new businesses cannot fulfil.
However, we’ve carefully selected partners with products suitable for our clients. As you set up your new business with us, we will recommend a few banks to consider. Whether you choose a Barclays Business Account or a Card One Business Account from our curated list, we ensure a seamless process to meet your financial needs.
What are the pros and cons of working with a simple company formation agent?
A company incorporation agent helps new businesses with online company formation and registration services. But with Your Virtual Office London, we go the extra mile and ensure your process is simple, seamless, and affordable. If you choose to form your company limited by share or guarantee with us, take the time to understand your goals, risk tolerance and incentives. With this understanding, Your Virtual Office London will advise you on the most suitable company structure and expedite your process by working with you to submit a company application without error.
There are no downsides to working with us!
What company documents do I need during simple company registration?
To register your company, you’ll need to submit the following documents —
What documents do I receive after new business registration?
Once your new limited company is registered, you’ll receive the following documents —
- Certificate of incorporation, which includes your company number;
- Official memorandum and articles association; and
- Share certificates.
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