How to start a company

Starting a business in the UK is a straightforward process, thanks to clear regulations and robust support systems. This guide outlines the essential steps to set up a company in the UK and get ready to trade.

What business structure should I choose for my business?

The first step in setting up your business is deciding on its legal structure. The most common types of business structures in the UK are:

• Sole Trader: Simplest structure, ideal for individual entrepreneurs. You are personally responsible for your business’s debts.

• Partnership: Similar to sole traders but involves two or more people sharing responsibility and profits.

• Limited Company (Ltd): A separate legal entity from its owners, providing limited liability protection.

• Limited Liability Partnership (LLP): Combines elements of partnerships and limited companies, offering limited liability while allowing for flexible management.

How do I choose a company name?

Your company name is your brand identity, so choose wisely. Ensure your chosen name is unique and complies with UK naming rules. You can check the availability of your desired name on the Companies House website.

How do I register my company with Companies House?

If you opt for a limited company, you must register with Companies House. You’ll need:

• A unique company name.

• A registered office address in the UK.

• Details of at least one director and one shareholder.

• Memorandum and articles of association (standard templates are available).

Registration can be done online, and it usually takes a few hours to complete. The registration fee is typically £50.

Do I need to register my company for taxes?

Depending on your business structure and activities, you’ll need to register for various taxes with HM Revenue and Customs (HMRC):

• Corporation Tax: If you’re running a limited company, you must register for corporation tax within three months of starting to trade.

• Value Added Tax (VAT): If your turnover exceeds £90,000, you must register for VAT. You can also voluntarily register if it benefits your business.

• Pay As You Earn (PAYE): If you employ staff, you must set up PAYE to handle income tax and National Insurance contributions.

Do I need to open a business bank account?

Separating your personal and business finances is crucial. Opening a business bank account helps manage your finances more efficiently and is a requirement for limited companies. View our business bank account comparisons here to find the best options for your business needs.

Do I need an accountant?

Maintaining accurate financial records is essential for compliance and business management. Consider using accounting software or hiring an accountant to help with bookkeeping, tax returns, and financial planning.

Do I need to obtain any necessary licenses or permits?

Depending on your business type and location, you might need specific licenses or permits to operate legally. Common examples include:

• Food Business Registration: If you’re starting a food-related business.

• Alcohol License: If you plan to sell alcohol.

• Street Trading License: For businesses selling goods or services in public spaces.

Check with your local authority to determine what licenses and permits you need.

Do I need business insurance?

Insurance isn't mandatory but it's a good idea to assess your business risks and choose the appropriate insurance coverage.

What are the different types of business insurance?

Key types of business insurance include:

• Public Liability Insurance: Covers claims made by the public for injuries or property damage.

• Employers’ Liability Insurance: A legal requirement if you employ staff.

• Professional Indemnity Insurance: Essential for businesses offering professional advice or services.

How can I start attracting customers for my business?

Creating a strong brand and online presence can be vital for attracting customers. Steps to consider include:

• Designing a Logo: Hire a professional designer or use online tools to create a memorable logo.

• Building a Website: Develop a user-friendly website to showcase your products or services. Consider using website builders like WordPress, Wix, or Squarespace.

• Setting Up Social Media Profiles: Establish a presence on platforms like Facebook, Twitter, LinkedIn, and Instagram to engage with your target audience.

Develop a marketing strategy to promote your business. Consider:

• Identifying Your Target Audience: Understand who your potential customers are and what they need.

• Setting Marketing Goals: Define what you want to achieve with your marketing efforts.

• Choosing Marketing Channels: Decide where to focus your marketing efforts, such as social media, email marketing, content marketing, or paid advertising.

How to launch a business?

With everything in place, you’re ready to launch your business. Plan your launch carefully to create buzz and attract customers. Consider hosting an event, offering promotions, or leveraging social media to spread the word.

Conclusion

Setting up a company in the UK involves several crucial steps, from choosing the right business structure to launching your marketing efforts. By following this guide, you’ll ensure a solid foundation for your business and be well-prepared to start trading. Don’t hesitate to seek professional advice to navigate any complex aspects of the process. Good luck with your new venture!