How to register a business in the UK

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

When deciding which structure to choose, many small business owners consider the following factors:

You don’t typically have to register before you can start trading as a sole trader. However, if you earn more than £1,000 in a tax year, you must register for Self Assessment (external link). This involves informing HMRC and applying for a National Insurance number. 

The steps to register as a sole trader (external link) include: 

1. Register for Self Assessment with HMRC by 5 October in your business’s second tax year.
2. Apply for a National Insurance number, if needed.
3. Choose a business name (optional).
4. Set up a business bank account (often recommended but not legally required). 

You will typically need: 

• National Insurance number.
• UK address.
• Contact details.
• Business start date.
• Description of your business activities. 

Deadline: You must register by 5 October in your second tax year, or you may face penalties.¹ (external link)

You will need to register your limited company with Companies House. You can do this via GOV.UK (external link). 

The steps to register a limited company (external link) include: 

1. Provide a registered UK office address.
2. Appoint at least one director.
3. Appoint a company secretary (optional for private companies).
4. Decide on a share structure and issue shares to shareholders.
5. Choose Standard Industrial Classification (SIC) (external link) code(s) for your business activities.
6. Create a memorandum and articles of association.
7. Pay the registration fee (external link).
8. Submit the application to Companies House. 

Deadline: You must file your first set of accounts within 21 months of the incorporation date.² (external link)

Other than appointing the important members of your business, there are also a few different pieces of information and paperwork that you may need when registering a business. 

Essential information checklist: 

• Contact information.
• National Insurance numbers for all involved.
• Business name (and any trading names).
• Registered address or business address.
• Director and shareholder details (for limited companies).
• Partner details (partnerships).
• Share capital and shareholding structure (limited companies).
• Bank account details for business finances.
• Memorandum and articles of association.³ (external link) 

As part of this process, you may also need documents establishing how you’ll run the company: 

• Employment contracts: These agreements map out the relationship you, as an owner, have with company employees, and how these relationships operate. It also defines the nature of each role and how these fit into your business operations.
• Shareholders’ agreement: This document can help to establish how your business is run and 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 outlines 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. 

Records you may 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.

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: 

• Other companies can’t use your business name.
• You can take legal action against anyone who uses your business name and brand without your permission.
• You can sell and license your business. 

Business names must comply with various rules. For example, you cannot have the same name as an existing company, and you cannot use certain words without permission, such as those suggesting a government connection. Offensive or misleading names are also not allowed. Limited Companies must typically use ‘Limited’ or ‘Ltd’ in their name. Sole traders can use their own name or choose a compliant business name.⁴ (external link)

Beyond business structure, you might need to consider additional registrations, such as: 

• VAT registration – Required if your taxable turnover exceeds £90,000 per year, or you can register voluntarily. This lets you reclaim VAT on business purchases, but means you must charge customers VAT.⁵ (external link)
• PAYE (Pay As You Earn) – Typically required if you have employees earning over £123 per week, if you pay anyone over that threshold through an agency, or if you provide benefits or expenses.⁶ (external link)
• Corporation Tax – Registration is automatic for limited companies. HMRC send a Corporation Tax return to companies after they have incorporated. You must typically file a return within 9 months and 1 day of the accounting period end.⁷ (external link)
• Making Tax Digital (MTD) – Many businesses are now legally required to register for MTD, a government initiative digitising the UK tax system, for VAT.⁸ (external link)
• Import, export, and customs registrations – Typically required for international trade.⁹  (external link)

Construction Industry Scheme (CIS) – May be required if you pay subcontractors for construction work. It involves making deductions from subcontractor payments and passing these payments on to HMRC.¹⁰ (external link)

Sole trader: It doesn’t cost anything to set up as a sole trader, as you don’t need to register as a business.¹¹ (external link) 

Limited company: It costs £50 to register a limited company online. Postal registration costs £71; however, there are different incorporation options that incur different prices.¹² (external link) 

Partnership: The fee for registering a partnership through software is £50, while postal applications cost £71.¹³ (external link)