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Registering a business in the UK is a straightforward process with many benefits. The government provides many options so that the people do not face any issues and make profit easier.
Advantages of registering your firm in the UK
- When you register your firm in the UK, it is a less time-consuming and simple procedure, and you can do it online and offline according to the owner’s preference.
- The workforce a person gets is highly qualified and has an up-to-date infrastructure.
- There is minimal government interference, and it can further support you financially.
- The UK has the least corporation tax charges. On top of that, a variety of tax benefits, as well as incentives, are provided.
- The individual has the opportunity to set up an ‘out-of-the-box’ business as the market is rich in competition.
Registration of the Business
The points that must be kept in mind while registering a company in the UK are:
Choose the Name for the Business
Firstly, you have to name your business to register it legally. Ensure that the name you desire is not already taken, as it is impossible for two firms owned by different parties to have the same registration name.
Words and special characters are meant to be done with utmost care as they may not be illegal or offensive. The trading name and the registered name could be different unless the firm has Ltd., LLP, or PLC nature.
Give Your Firm an Official Address
You have to provide the company with a UK postal address to get official notifications or letters. You just have to keep in mind that the address should be from the registration country.
Remember that the address would be available publicly; therefore, go for the appropriate measures if you are operating your business from your home.
Select the SIC Code
The SIC code shows the commodities the business deals with. A list of SIC codes is available on the internet, so you can decide the code according to whatever business you are into.
Designate the Director/Directors
It is mandatory to appoint at least one individual as the director with his/her consent. The director is simply designated as the legally in charge of the business. The director should have an age above 16 years.
Two addresses of the director are to be given. One would be the official address of the service, and the other one would be residential.
Brief About the Share Plan
If the company comprises shares (in the case of Limited companies), their information must be given. For example, you have to mention the type and the number of shares.
No limits are there on the shares and in their amounts as well. The rights each share possesses have to be listed down. After finding the initial value of the business, make sure if any amount is unpaid or not.
Provide the List of Shareholders
In case of multiple shares, provide the information about the person under whom they are being controlled. For example, if you are the sole owner of a business, all the shares are yours.
A public address has to submit of the shareholders along with some other details (any three of below) like:
- Initial three letters of birth town.
- Initial three letters of eye colour.
- Initial three letters of mother’s maiden name.
- Ending three digits of contact number.
- Ending three letters of father’s forename.
- Ending three characters in the National Insurance Number.
- Ending three characters in the passport number.
If anyone holds more than 25% of the shares, he/she is termed as the Person with Significant Control. Their details have to be filled out once again.
Providing Signature of a Statement of Compliance
As the firm is legally running, you have to state that you fulfil the Companies Act’s requirements and desires. In addition, you have to make it clear that you have to accept the Memorandum of Association that deals with the rules regarding running the business.
Make payment for the Company Formation fee
You’ll have to pay a minimal charge for registering the firm through a Company House to complete the process.
Options to Set Up the Firm or Business
Several options exist in which people, either nationals or foreign, could get their companies registered to set up the start-up.
- Sole Traders: Being a sole trader is the most simple way to set yourself up, but you’ll be completely responsible by yourself for the debts you’ll be taking. You may have to do the accounting work on your own as well.
How to Register as a Sole Trader?
For setting yourself up as a sole trader, you have to inform the Her Majesty’s Revenue and Customs that all the tax you pay is by Self Assessment. A tax return is meant to be filed every year.
Criteria
- An earning of more than £1000 between April 6, 2020, and April 5, 2021.
- If you are a self-employed person, genuine proof is required to register as a sole trader.
Responsibilities
- Maintaining the records of the sales and all the expenses
- The Income Tax is to be paid according to the profits you make
If the turnover you get goes above £85000, you have to register yourself for the VAT. It could be done for a voluntary purpose if it suits your firm.
- Limited Companies: The finances in the firm are kept separate from your finances that have to be reported from time to time. The loss occurring would also affect the money of the shareholders.
- Partnership Business: In it, the business is in the hands of two or more persons. It requires choosing a person as your nominated partner responsible for managing accounts, taxations, and the maintenance of records.
Other things required
- Appropriate license or permits
- Insurance
Frequently Asked Questions?
Q.1. How much money is required to start a business in the UK?
A.1. It costs £12 and you can pay by Debit or Credit card. Also, your company will register within 24 hours.
Q.2. Which is better: sole trader or LTD?
A.2. You can save tax when you switch from a sole trader to a limited firm.
