More and more entrepreneurs are registering their business in the UK due to tax advantages and other benefits. The legislation allows several registration models, but Ltd. is preferable to PLC and sole traders. Discover how to comply with local rules in 2023.
The easiest way to register is through a company formation UK assistant authorized by the FCA. The agency will do all the paperwork for you, provide a business account, a debit card, and an app to go with it. Here are the basics:
Advantages of Limited Company
The key difference between Ltd. and other forms of registration is the absence of personal liability. If something goes wrong with the business, you will not need to worry about losing your assets. A limited company is legally separate from the individuals who run and own it. Corporate finances are not linked to their personal accounts.
In comparison, sole traders are held personally liable if their business goes under. Their personal assets are therefore at risk at all times. The third option, public limited company, will let you sell shares to the public or appoint more than one director. Registration is more complex.
How to Register?
To set up an Ltd., you have to go through the incorporation procedures, including registration with Companies House. Online services will help you save time and effort, as you will delegate most of the work. Here are the key aspects:
- Choosing a company name: aside from ending in “Limited” or “Ltd”, your name must be unique. Close resemblance to other company names or offensive words is prohibited. You can check this via the Companies House register.
- Registering the name as a trademark: prevent other businesses from using it.
- Specifying a physical location in the UK for the business address. This could be your home address or an address (virtual office) registered through the agent.
- Appointing at least one director and shareholder.
- Appointing a company secretary (optional).
- Creating the ‘prescribed particulars’ documents describing the business structure and rights and influence of every shareholder.
- Creating a ‘memorandum of association’ expressing all shareholders’ consent to start the company.
- Creating ‘articles of association’ (rules of management) approved by all directors and shareholders.
- Registering for corporation tax within 3 months after launch.
Registering at Companies House
The cost of registering online and by post differs. The institution will also charge extra for its same-day service. To acquire a “certificate of incorporation,” you have to submit the following:
- company name;
- company address;
- name of one/more directors;
- nominated shareholder(s) and their rights;
- SIC code;
- “memorandum of association”;
- “articles of association”;
- PSCs (people with significant control).
All-in-one Formation Package
Register your business and open an account remotely via the Internet. If you decide to use the services of an electronic money agent, check that it has authorization from the FCA.
Opening a limited company with one owner/director is the easiest way. There are just a few requirements. First, you will be asked for a valid ID document. Secondly, you need to prove residency (some companies also help non-residents open businesses). Finally, you need an address. That’s all!