With the recent problem of people getting laid off and having a difficult time finding any new work, a lot of people have lost faith in employment altogether and are now more interested in setting up their own businesses. Whether that is an online business or a physical store, you will need to register the business to make it legal. A lot of people that were service providers such as accountants or lawyers are also now transitioning to being freelance service providers rather than employees.
There are different approaches to business registration depending on the kind of business you are trying to register. Generally, the bigger the enterprise you want to register, the more expensive the process will be; not to mention that the amount of required paperwork will be extensive. Here is a quick run-down of everything that you need to know about registering a business in the UK.
Understand The Business Types
Before you register your organization, consider how you want the business to operate. Broadly speaking, businesses are either registered as sole traders (proprietorships), partnerships, corporations, or limited liability companies. Each of these types of organizations not only dictates the structure of the business and how it is registered, but they all also have implications for how the business will be able to make profits, the level of liability of the owners, the tax structure that will be applicable to the business, and what the business will be able to do as an organization.
In the long run, these are very important considerations. However, it is not important that you have them all sorted out right from the get-go. There are plenty of successful businesses across the globe today that started off as a simple sole proprietorship or a partnership between a couple of friends and eventually grew into massive entities. This is something that can be updated later on.
Choosing A Name
Your business will have its own identity and an important part of that identity is its name. In many cases, the name of the company is its biggest asset and can be worth millions or even billions of dollars. If a company name has enough trust and authority in a market, you could put that same name on a product that is completely unrelated to the company’s line of business and it would still sell.
However, when selecting a name for your business, make sure it is within the eligibility criteria. Also, it is advisable that you conduct a search on your preferred names and check if they have already been used by someone else. If your preferred name meets both checks, then you can go ahead and shortlist this as your company name.
The Team
In the case of a sole proprietorship, the business will be registered in a single person’s name. In the case of a partnership, it will be registered in the name of the partners, and in the case of a limited company, it will be registered in the name of the founders. However, in all cases, you will need a registered office address as that is one of the most important credentials at the beginning of your journey. More specifically, you need to have a physical mailing address where you can be contacted.
Even if your business is digital and doesn’t operate from a physical presence anywhere, by law, you are still required to have a physical address. This could be your own personal home address or you may use some registration address services, but be sure to include this in your registration forms.
At the same time, you will also need to prepare some documentation regarding the team members including specifics about their role in the business, and also some information about themselves. Especially if you are going to be enlisting them as partners or company board members, this is an important step. If you still haven’t finalized your team, you can always make changes later. As your requirements change you can add or remove members of the company later as well.
Documentation
Deciding on the founding members is also important because this will play a role in the documentation that you prepare for the business registration. This includes the articles of association and the memorandum of association, unlike other parts of the business registration, you only get to create the memorandum of association and articles of association once when you are setting up the business. Making changes to this later down the line will not be possible.
Both of these documents are required for all kinds of physical business, but if you are setting up an online business you can be exempted from having to create a memorandum of association. Also, in the articles of association, you can easily find some free templates known as model articles so you don’t have to start building from scratch. However, if you want to create something that is completely customized to your organization, make sure you have a consultant on board that can double-check your paperwork.
Before getting into the actual registration process, also check what kind of accounting documentation you will need to keep. This will be used for your tax returns and you might also need to submit this information in the case of an audit.
Registration
With all your documentation prepared, it is time to send it to the Companies House and initiate your registration process. If you are a sole trader, then you will not need to register with the Companies House but all other business structures will need to submit their documents. Also, make sure you have chosen the right SIC code when sending in your paperwork so that they can accurately identify the nature of your business.
This is also a good time to apply for your corporation tax. If you want to apply for tax later you can always send a set of registration documents to HRMC later on.
Once you complete registration process for your company you must look for the best communication system for your business along with other facilities. VoIP is a highly popular phone system that comes with advanced features that help businesses in improving customer experience, reducing calling cost and boosting sales.
In most cases, the registration process should not take more than a couple of weeks if you have done all your paperwork right. In fact, when applying for tax registration, you can get the tax number in less than 24 hours. If you are trying to register with the House of Companies, this can take a few more days. Applying by post also takes a little bit longer since the paperwork has to physically be submitted; applying online is generally quicker. The process isn’t very expensive. Usually, if you are applying by post, the entire process will cost less than 40GBP. If you are applying online, it will cost even less.
