Business start-up resources

Incorporating Your New Company in the UK

New self-employed business ownerAll new business owners whether trading as a Sole Trader, Partnership (LLP) or Limited Company are required to take certain steps to satisfy various legal requirements.

You can complete all aspects of registration online using third-party services or directly with Government agencies.

There are three main options available when incorporating a new business:

  • Trade as self-employed or a Sole Trader. Many individuals trading by themselves in traditional trades take this option.
  • Operate under a Limited Liability Partnership.
  • Register as a Limited Company.

Self Employment Process

You need to inform HMRC within three months of trading, and your income declared and managed through your self-assessment tax return. There are fines for noncompliance.

You also need to pay class II National Insurance contributions and register for PAYE if you are employing others in your business. Depending on your sales turnover you may also need to register and charge VAT to your customers.

Formation of Limited Companies

If you want to form a Limited Company then a specialist service that integrates with the Companies House database that holds all registrations, is required.

The basic cost is less than £30 with the whole process undertaken online. You can have your new company incorporated the same day.

What Does the Process Entail?

It's a fast and straightforward process usually taking 10 minutes to enter your details. Just choose one of the many agents that are accredited by Companies House. Submit your details online, and if accepted, you'll receive your paperwork by email in three to four hours. You'll need the following information:

  • The proposed name of the company that you want to register with Companies House. All online services check against the current active list to avoid duplication. If your name is too close a match to an existing company, you'll need to choose something else.
  • The registered office address. This address can be your own home office, your accountants or solicitors.
  • The names of the Company Directors.
  • The name of the Company Secretary. There is no longer a legal requirement for a separate person, but you can choose one if required.
  • The shareholding and ownership structure.

Once you enter these details, then the registration process is undertaken. Depending on the service you opted for you'll receive your documentation either electronically or hard copies in the post. Most agents will try to up-sell you additional services such as bank accounts and virtual office services. Only choose these options if you need them for your business; otherwise you are wasting money.

What Documents Will I receive?

These vary depending on the service you have chosen but could include some or all of the following:

  • Standard Certificate of Incorporation.
  • Copies of Memorandum & Articles of Association.
  • Opening Statutory Registers.
  • The company directors' first meeting minutes.
  • Elective Resolutions and accompanying minutes.
  • Stock Transfer forms.
  • Share allotments completed and filed.
  • Share Certificates.
  • Legally required forms including forms 288a, 288b, 287, G88(2) and 225.
  • Any level of Authorised Capital.
  • Additional Share Classes.
  • A full copy of "Table A" Regulations.

You'll need a UK registered address to form a UK company. If you're in Northern Ireland, you'll need to contact the Northern Ireland Registry.

Proof of ID Information Required

Before you start the process, make sure you have the following information to hand as you'll need to enter it online during the process.

  • Directors and Secretaries full names.
  • Town of birth.
  • Contact telephone numbers.
  • Passport number for anti-money laundering regulations.
  • National Insurance (NI) numbers.
  • Father's first name.
  • Eye colour.
  • Place of birth.
  • Mother's maiden name.

Once registered, you're legally required to submit a set of abbreviated annual accounts and an annual return. These can be submitted by your accountant online.

Registering for VAT

If your turnover is likely to exceed a certain threshold, then you will need to register for VAT. You'll receive a VAT number and have to add 20% VAT onto every sales invoice you raise. Your VAT number must also be shown on invoices so your customers can reclaim the VAT charged. You will be required to submit a quarterly VAT return which most accounting software packages will calculate for you.