Although having an idea is crucial to having a business maintain a steady cash flow, it's just one step. Before you commence business operations in any country, you'll need to register your business. This gives your business the legal right to operate within the country.
To register a business in the UK you'll have to follow some laid down processes.
This article will outline these processes to make registering your business seamless for you.
#1. Choose a Company Structure
The very first step to take to register a business in the UK is to choose a company/business structure.
A company structure is an organizational pattern that shows how a company operates - a system to depict how the company runs its activities to achieve its goals.
These activities majorly include the various roles and responsibilities of the staff as well as the rules and regulations guiding the organization.
The structure of your business is also a major determinant for your tax management; how much tax you pay and how you pay it.
There are three main business structures in the UK to choose from, these include:
● Sole Traders
A sole trader business is the simplest business structure to set up and operate in the UK as you are solely responsible for running your business. As a sole trader, you are self-employed and enjoy the profits as well as losses that come from the business.
A partnership may be seen as the opposite of a sole trader business structure. Here, 2 or more persons come together to run a business. Hence, they share responsibilities as well as profits and losses.
● Limited Companies
A limited company exists as a separate legal entity from the individual owners of the company. This means that the finances of the company are separate from your finances.
The goal of this business structure is to shield the business owner from the losses that may be incurred by the business. To set up a limited company in the UK you'll have to register your business with Companies House, a process called "incorporation".
For each of these business structures, there are laid down rules guiding its registration.
#2. Choose Your Company Name
Once you've decided the business structure that you'd prefer for your company the next step would be to choose a business and register your business name.
The subject of picking a name is a crucial one because your business name is your prospects' first encounter with your business. However, Picking a business name can be quite a task sometimes, especially when a newbie in the business world.
Also, you would want to choose a name that no one has already registered for business.
Here are some tips to help you choose a business name:
● Do proper research.
Good research is a sure-fire strategy to choose the best name that suits your enterprise. You need to dig deep into the market, get a clue from other competitors that can help you come up with a unique name for the business.
● Your business name should speak about your business.
In other words, your business name should give a clue to what the company is all about at almost a glance.
● Choose a short and catchy name.
Your business name doesn't have to be very long to tell about the business. A punchy business name will easily stick to the memory of your prospects, hence it should not be long or hard to spell.
● Always check to ensure if the name you've chosen is available.
● If you choose the sole trader business structure, you can decide to use your name.
While choosing your business name also decide on an address for the business, you'll need to enter your business address during registration.
#3. Allocate Company Shares
As part of the requirements of registering a company in the UK, your company will need to have shareholders. Hence, you'll have to allocate shares to your shareholder(s).
There's a quick way to do this: allocate one share, worth £1 to each shareholder. If you are a sole trader, you can be the shareholder of your company.
#4. Complete the Memorandum and Articles of Association
The memorandum and article of the association are two very essential documents for your business registration. They formalize your business operations - how your company will be run.
The key players in the business - director(s), shareholder(s), and secretary will need to agree on the stipulations in the document and sign the.
They need to be agreed on and signed by the company before you register a UK limited company.
#5. Register Your Business at Companies House
Companies House is a government body responsible for handling the information of all forms of companies in the UK. So, after you've decided on a business name and address, the next move will be to register your business with the Companies House.
At the Companies House, you'll file all the details of your business based on the state's legislation.
The Companies House will require specific details such as:
● A Registered Office
Your registered office is where the Companies House and HMRC or any other government body can reach the company directors if need be. The office must be in the UK.
● Company Directors
Your company is required to have at least one director, and the Companies House will require the details of the director or directors.
As part of the requirements of registering a company, the Companies house requires that every company must have at least one shareholder.
However, if you are a sole trader, you can be the shareholder as well as the director of the company. Companies House will also require the details of the director(s).
● Your ‘memorandum of association’ and ‘articles of association’.
● Your SIC code
● Details of PSCs (people with significant control): people who own large shares in your company.
When you've gathered all the requirements, submit them to the Companies House and wait to have your brand new company up and ready. Your new company can be ready as quickly as the same day. More so, you can register your business with the Companies House online.
The cost of registering your business registration with Companies House will, however, depend on the method of registration and how quickly you want the service.
How to Register a Business in the UK Conclusion
Registering a business in the UK may look like a lot of work to do if you are just venturing into business, but not be as cumbersome as it may appear.
You only need to understand how to register a business in the UK to get your company up and running within the shortest possible time.
And, hopefully, now you know the exact steps to take in registering your new business, you can get on and start making some money.