Most businesses in the UK register as sole traders, partnerships, private or limited companies. What you need to do, and which licenses or permits you need, depend wholly on the type of business that you register. There are also several rules that most people have to follow. The rules are different for companies that set up online portals to sell goods and services online, those that import or export goods from abroad, or ones that are mostly data-heavy businesses and store personal information. Permits, licenses, legalities, regulations, and rules differ for each of these based on the type of formation.
Let us look at the main types of companies in brief:
Setting up a company or business as a sole trader is relatively easy and straightforward. However, all sole traders are personally responsible for paying off the debts incurred by the company. Many people prefer starting as sole traders, and then gradually make the shift to partnership or limited companies.
The finances and accounting of the company are entirely separate from the owners’ funds. However, there are several management responsibilities and reporting duties that have to be strictly followed by the owner, and all employees of the company. Most people get help from an external auditor and accountant.
As the name suggests, the ownership of the company is held between 2 or more individuals. This helps mitigate the risks by sharing equal responsibility of all profits or losses and debts. The accounting responsibilities also differ from Sole Traders and Limited Company.
In the UK, a private limited company takes less than 24 hours to incorporate and is extremely useful for one or two directors on board.
Overview of documents and details to register a limited company in the UK
Before you start the process, you should have a few things ready. These are names for your company, a UK address for correspondence, a minimum of one director (can also be a non-UK Permanent Resident), and one shareholder (can be another company or an individual). You should also have three pieces of valid documentation and tax records ready for yourself and your guarantors or shareholders.
Some of these documents include:
- Passport number
- Fathers First Name
- Telephone Number
- Mother’s Maiden Name
- Proof of Address
- National Insurance Number
- Town of birth
Once you have these documents ready, you would need to register online with Companies House and furnish an ‘Articles of Association’ and ‘Memorandum’ during incorporation.
Once you have registered, you would get a ‘Certificate of Incorporation’ from the government to show that your company legally exists, and is allowed to set up further documentation for Corporate Tax, Bank Accounts, and Insurances. The Incorporation Certificate also holds the Formation Date and Company Number.
All payment details and fees are available with professionals and on the government website. These payments need to be made online via debit or credit card or a PayPal account. While this may seem like a reasonably straightforward process, it is usually not. You could rely on professionals and register a company with Crunch. Your company set up would be seamless and quick.
What other ways are there to register?
Most owners need to register the company for Corporation Tax. The registration and filing need to start within three months from the date of incorporation. You can only file for Corporation Tax if you have a valid Certificate of Incorporation and can show a Bank Account with a registered Bank. Credit Unions are not accepted.
If you do not want to register online, you can register through the post, or by using third-party software. You can also register with professionals who take care of the paperwork, Articles of Association, and Memorandum, and any follow up for documentation.
If you do not want the term ‘limited’ in your company name, you would have to register the company offline through post only. If you wish to register by post, you would have to use form IN01. However, all postal applications take nearly eight to ten business days and have to be paid through cheque made out directly to Companies House. The address can be found on the form. The post also offers an express service, but the charge for it is higher than the regular one.
Are there any changes to the company registration process because of the EU transition?
No, there are no changes (currently) to the company formation rules, regulations, and steps in the UK. The United Kingdom also does not have any restrictions on the nationalities of owners or managers.