How to register a business in the UK

Authored by Hiscox Experts.
8 min read
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Registering a business isn’t as complicated as you might think. In fact, depending on your business type, you may not need to register your company at all.

This guide follows the process, including the hows and whys of registering a business, and the paperwork you might need to get your hands on.

Do I need to register my small business

Yes, as the founder of a new business it is your responsibility to register with the relevant authorities. For example, if you are running a limited company, you’ll register with a company formation agent or Companies House (external link), whereas business partnerships should be registered with HMRC (external link).

If you are operating as a freelancer or sole trader, you do not have to register your business – you just need to make sure you have a National Insurance number and let HMRC know that you will be paying your taxes via a yearly Self Assessment form (external link). In this case, you’ll be self-employed, so all the relevant tax return forms also apply.

How to register a business name

Your business name is set as part of the process of registering your business itself. You may also want to trademark your name (external link), even if you are a sole trader or freelancer. This is so:

  • Another company cannot take it
  • You can take legal action against anyone who uses your name and brand without your permission
  • You can sell and licence your business.

Other information you need to know before registering your company

People you need to appoint

Besides making a confident choice for your business structure and choice of name, you might need to name key stakeholders. This is especially pertinent if you’re not planning to operate as a sole trader. When you register your company, you might need to name directors and other key individuals.

Directors and secretaries

Directors usually exist within limited companies and are responsible for the day-to-day management of business activities and budgets. They’re also responsible for the upkeep of legal obligations and documents, so you know your business is operating legally and to its full potential.

When your business is new, you might appoint several directors straight away or name yourself as the sole managing director.

A secretary works alongside a company director to ensure administration operates smoothly behind the scenes. This entails actioning and organising important financial and legal documents, plus playing a pivotal role in company communications.

Shareholders or guarantors

A company can have multiple shareholders, all of which are individual owners of the business. Shareholders provide financial security and so can dictate major business decisions. They sit above directors within a company structure, and each owns a small share of the business – meaning they make money from company profits.

Guarantors, or members, are also controllers of a business, but their responsibility is limited by the size of their investment – or financial guarantee – in the company. They are also responsible for the management of directors and financial decisions.

In a basic business structure, you might be the sole shareholder and managing director – or you could decide to create a more complex balance of power to suit your plans.

People with significant control (PSCs)

A company PSC is anyone who has a certain amount of (or significant) control and influence over business operations and decisions. They are often called ‘beneficial owners’ and are defined by whether they have:

  • A 25% share (or more) in the business
  • The right to hire or dismiss company management and directors
  • More than 25% of company voting rights.

Paperwork to keep in mind

Other than appointing some important members of your business, there are also a few different pieces of paperwork that you need to keep in mind when you register a business.

Documents agreeing how you’ll run the company

  • Employment contracts: These agreements map out the relationship you, as an owner has with company employees, and how these relationships operate. It also defines the nature of each role and how these fit into your business operations.
  • Shareholder’s agreement: This document could be key when setting out how you run your business and, more importantly, who has a say in how you run your business. The agreement sets out shareholder rights and responsibilities, as well as the size of their individual shares, which defines what decisions they can and can’t make.
  • Partnership agreement: This outlines the terms and conditions of your partnership for all partners. It includes partner names, the purpose of the partnership, partner contributions and responsibilities, and details of the structure of the company.
  • A business plan: A business plan details all the key players in your business and how you plan to operate. This includes the business manager, directors, sales strategies, budgets, and your products and services.

What records you need to keep

As a small business owner, you may need to keep:

  • Evidence of sales and any business income
  • Expenses, stock receipts, and a stock inventory
  • All money taken from business accounts or contributed to accounts by yourself or shareholders/members
  • Records of purchased and sold business assets
  • Copies of any bank statements
  • Leasing agreements.

How to register your business

Your type of business – for example, whether you’re self-employed, a partnership, or limited company – will affect how you register your company.

Where and how to register

How to register as a sole trader or freelancer (self-employed)

  • Where? You don’t need to register as self-employed with any authority
  • How? As a sole trader, you are still responsible for keeping business records, paying income tax, and completing a yearly Self Assessment tax return (external link). You just need to inform HMRC and apply for a National Insurance number.

How to register a limited company

You will typically:

  1. Register an official business address
  2. Choose a SIC code (external link)
  3. Supply personal information relating to yourself and/or your shareholders
  4. Pay the registration fee (external link).

How to register a partnership

Where? You need to register your partnership with HM Revenue and Customs.

How? To register a partnership or business partner, simply go through the Government website (external link). From there, it will direct you to register your business for Self Assessment with HMRC. You can also register via post with an SA400 form (external link).

How much does it cost to register a company name in the UK?

  • Sole trader: It doesn’t cost anything to set up as a sole trader, as you don’t need to register as a business
  • Limited company: It costs £12 to register a limited company online. Postal registration costs £40, however, and there are different incorporation options that incur different prices
  • Partnership: The fees for registering a partnership are the same as for a limited company – £12 if you choose to do it online, and £40 via post.

How long does business registration take?

If you register your company online, the whole process is usually completed within 24 hours. If you’re registering by post, however, this can take around eight to 10 days.

It is important to keep in mind that your business cannot begin to operate or sell products and services before you have received confirmation of your business registration.

What certification will you receive?

Certificate of incorporation

If you register your business through Companies House, you will receive a certificate of incorporation (external link). This will include:

  • Your company’s name
  • Your unique business registration number
  • The Registrar’s seal
  • The date your business was registered/incorporated.

Memorandum of association

When you register your business online, a memorandum of association (external link) will be created and sent out to you automatically. This is a legally binding and signed contract in which all shareholders, guarantors and members agree to create your company.

If you register by post, you will need to create this yourself using the Government’s template (external link).

Articles of association

Like the above, your articles of association (external link) will be sent to you on completion of your business registration. These articles are vital to your company, as they detail how the business is going to be run, and set out rules agreed by shareholders, guarantors, members, and directors.

Next steps for your small business

Business bank account

A business bank account helps you to make sure you’re accurately recording all your incomings and outgoings. It’s best to keep your personal expenses separate from your company profits – plus, it also makes it easier to pay staff, buy stock, and source any necessary expenses.

Unique Tax Reference (UTR) number

Your UTR number is given to you by the HMRC within three weeks of you registering your business. You need this 10-digit number when you file your yearly Self Assessment tax return, so it may be a good idea to keep this in your records and have it on hand for easy access.

Business insurance

Before you open your doors – whether physically or digitally – you might find it’s beneficial to do some research into finding the right business insurance policy for your circumstances. Insurance can help to protect you, as an owner, and your business from certain situations that may arise. In fact, for some businesses – those with employees, for instance – business insurance can be a legal requirement (external link). If you’d like to learn more about how having cover could help, the Hiscox business insurance page has more information.

Business insurance may help with:

  • Accidents on company premises
  • Stock and business property damage
  • Legal costs (covered under public liability insurance and employer’s liability insurance)

To discover how the above insurance types could help your business, head to the Hiscox public liability and Hiscox employers’ liability cover pages for more.

At Hiscox, we want to help your small business thrive. Our blog has many articles you may find relevant and useful as your business grows. But these articles aren’t professional advice. So, to find out more on a subject we cover here, please seek professional assistance.

Hiscox Experts

The Hiscox Experts are leaders valued for their experience within the insurance industry. Their specialisms include areas such as professional indemnity and public liability, across industries including media, technology, and broader professional services. All content authored by the Hiscox Experts is in line with our editorial guidelines.