BY Emily Kirschenbaun, December 29, 2022

Do I Need to Register My UK Business? 

Do I Need to Register an Online Business in the UK? 

6 Steps to Register a Business in the UK

1. Choose Your Company Type

2. Register a UK Business Name

3. Choose an Official Address for Your Business

4. Memorandum and Articles of Association

5. Get Your SIC Code

6. Register Your UK Business Bank Account

How Much Does It Cost to Register a Business in the UK?

Choosing The Right Payment Service Provider for Your New UK Business

The Bottom Line: You Can Easily Register a Business In The UK

FAQs

How much money is required to register a company in the UK?

Do I need to register my business name in the UK?

Can I run a business without registering?

Do I need to register my small business in the UK?

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Starting your own business is an exciting endeavor. Whether you’re opening a small ecommerce site or planning to conquer the world with a large corporation, there are few thrills greater than being your own boss. 

Before you get to work on your entrepreneurial endeavors, you’ll need to register your business in the UK. While there’s plenty to be done to ensure that you can operate legally in the country, there’s no need to stress out.

From figuring out whether you actually need to register your entity to submitting your paperwork to the correct authorities, this 6-step guide will help you to ensure you register your business in the UK the right way. 

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Do I Need to Register an Online Business in the UK? 

Online businesses must follow the same rules as brick-and-mortar businesses, so yes, they do need to be registered. 

Of course, an online business can have customers all over the world. Setting up an ecommerce business in the UK doesn’t limit where you can sell your goods and services, but you’ll want to make sure that you have systems in place that allow you to accept global payments..

With Pay.com, your customers can pay with their preferred payment methods, no matter where they are in the world. 

6 Steps to Register a Business in the UK

1. Choose Your Company Type

The first step in the registration process is to choose which type of entity you’d like to establish. Following this, you’ll need to register your business either with HMRC or Companies House.

There are a few different business structures in the UK that you can choose from when you register. The one that’s right for you will depend on your industry, whether you plan to have employees, how much turnover you expect the company to generate, and other operational considerations.

Let’s take a closer look at the different types of legal structures you can choose from.

Limited Company

Limited Companies in the UK must be registered with Companies House and include the suffix “Ltd” or the word “Limited” at the end of their name. These entities must also be registered for corporation tax within three months of registering with Companies House.

Limited Companies are legally separate from the people who run them. This means that your personal assets can’t be used to satisfy debt or other liabilities should the company run into trouble. 

These entities are either limited by shares or limited by guarantee. Limited by shares means that it’s a for-profit company that’s legally separate from its owners. The company has shares and shareholders and can keep the profits it makes after paying taxes. 

A company that’s limited by guarantee, on the other hand, is more commonly known as a not-for-profit. This type of company is also legally separate from the owners, but instead of shareholders it has guarantors and any profits earned are reinvested into the company. 

There are two types of limited companies in the UK:

• Private limited company (Ltd.): A private limited company is registered at Companies House and must have at least one director and one shareholder. It is a separate legal entity that has its own assets, profits and debts. Company shares are not publicly traded and there is no minimum investment necessary for someone to become a shareholder. Each shareholder’s liability is limited to their percentage of ownership in the company.
• Public limited company (PLC): Most companies start out as private limited companies and then may become a public limited company after experiencing some growth. Like a private limited company, a public limited company has directors and shareholders, but the difference is that the shares can be publicly traded. This gives the company the ability to raise funds more easily. However, it also comes with more complicated tax and financial reporting requirements. In order to become a public limited company, the company must have issued shares with a  value of at least £50,000 to the public.

Partnership 

In a partnership, two or more people join forces to start a business together. The partners share the profits and company dividends, but also have equal responsibility for any debts or losses as well as national insurance. 

Many small businesses are run this way, under one of the following categories:

• General partnership: In a general partnership, all profits and liabilities are shared equally among the partners. General partnerships must register with HMRC. One partner is designated as the nominated partner and is responsible for filing the company’s taxes. All of the partners must also file their own individual tax returns. 
• Limited partnership: In a limited partnership, there is one (or more) general partner who is both responsible for the day-to-day management and is liable for any losses or debts of the company. In addition, the partnership has one or more limited partners who provide financial support but are not involved in the management of the company. Limited partners are only personally liable for the amount they invested in the company. 
• Limited liability partnership (LLP): If none of the partners want to be personally responsible for company debts, then an LLP could be the way to go. In this type of partnership, the partners are each responsible for paying income taxes on their share of the company’s profits, but they are not liable for debts at the personal level. Unlike other partnerships, a written agreement is required to establish an LLP and the business must register the business with Companies House. 

Sole Trader

The simplest type of business is a sole trader. Here, there is no legal separation between you as an individual and your business. 

A sole trader is not required to register the business with Companies House, but must register with HMRC for Self Assessment tax returns to ensure that you pay income tax and national insurance. 

As a sole trader, you can choose to operate your business using your name or to designate a company name. Sole trader company names are not allowed to include the words “limited, Ltd, limited liability partnership, LLP, public limited company, or PLC”. They also can’t be offensive (e.g. include curse words), contain sensitive words (e.g. bank or accredited), or imply a connection to any government authority. 

You would need to check local databases and make sure that the name you choose isn’t trademarked or in use by another business. 

Overseas Company

IIf you already own and operate a company in another country and would like to open a physical branch in the UK, you can register with Companies House as an overseas company. All you need to do is fill out a simple form and submit it to Companies House along with the £20 fee. 

Summary Table: Legal Structures for UK Businesses

Type of Business	Registration Requirements	Taxation
Limited Company
Private Limited Company	Register with Companies House	Corporation Tax Company files its own taxes and shareholders/directors liability is limited to their share
Public Limited Company	Register with Companies House	Corporation Tax Publicly traded shares and more complex tax reporting
Partnership
General Partnership	Register with HMRC	Partners pay income tax on their share of profits Register for VAT
Limited Partnership	Register with HMRC	Partners pay income tax on their share of profits Register for VAT
Limited Liability Partnership	Register with Companies House	Partners pay income tax on their share of profits Register for VAT
Sole Trader
	Register with HMRC	Pay national insurance and income tax
		Register for VAT
Overseas Company
	Register with Companies House	Corporation Tax

2. Register a UK Business Name

When setting up a Limited Company or an LLP, your next step is to register the business name with Companies House. 

Before doing this, you must make sure that the name you want to use is not already taken.You can use the Companies House company name availability checker to search for the name. If it isn’t taken, it’s a good idea to trademark it so that no one else can use it. 

There are a few things to consider when choosing a business name, like making sure it’s unique and memorable and also aligns with your industry and messaging. 

From a legal standpoint, you need to make sure your business name doesn’t violate any of the following rules: 

• Same as: If you search Companies House and discover that your suggested name is the same as another registered company, it either means the exact same name is in use or it’s only got very slight differences, like using a “+” or “&” symbol instead of the word “and.” Either way, you won’t be able to register this business name unless you get written permission from the company already using it.
• Too like: A company name that is very similar to an existing registered company will also be rejected. HMRC gives the example of “Easy Electrics For You Ltd” and “EZ Electrix 4U Ltd.” Despite the different spellings, the names are too similar and the business that registered first would be granted the permission to use the name. 
• Offensive language: Most people are unlikely to choose a business name that includes a curse word, or racial or religious slur. If you’re thinking of injecting some humor into your company name, be sure that it’s in good taste. If you cross the line into adult or distasteful humor, your name will probably be rejected. 
• Sensitive words: The UK government maintains a list of sensitive words that you need to get permission to use in a business name. For example, if you want to use “insurance” in the name, you’ll need permission from the Financial Conduct Authority. Words related to the royal family, like His or Her Majesty, Prince, Queen, and Windsor, also require special permission. 
• Other regulated words: In addition to sensitive words, there’s a list of regulated words. You will also need permission from certain professional bodies if you plan to include any of these words or phrases in your company name. For example, if you want to use the words “Olympic” or “Olympian,” you would need permission from the British Olympic Association. 

3. Choose an Official Address for Your Business

Every business in the UK must have an official company address that will be a part of the public record. You can choose whether this will be your home address, an office, or some other location. 

The address must be a physical location (not a P.O. box) where documents can be delivered and proven to have been received. That said,  it doesn’t need to be the address of the location from which you actually operate the business. 

For example, if you plan to work from home but don’t want to make your home address public, you can easily find an accountant or other professional who offers the use of their business addresses for a fee. 

4. Memorandum and Articles of Association

Most businesses registered in the UK need to have two documents: a memorandum of association (MOA) and articles of association (AOA). Before you register a business in the UK, the company director(s) and shareholder(s) need to sign these documents. 

An MOA is automatically generated when you register your business online. It must be signed by the initial shareholders and directors to indicate that they agree to create the business. Once this memorandum has been registered, it cannot be edited or changed. 

The AOA are essentially the company’s operating policies as determined by the directors, shareholders and secretary (if there is one). You can draw up your own articles or find a template online and send the document to Companies House when you register your entity. 

5. Get Your SIC Code

As part of the company registration process in the UK, you must also find your Standard Industrial Classification of Economic Activities (SIC) code. 

These codes are used to classify businesses based on their industry and serve as the basis for analyzing and reporting statistical data on various industries. The goal is to help Companies House identify the category of business you are operating. 

6. Register Your UK Business Bank Account

If you are registering your business as a limited company, you are required to open a business bank account. 

To do this, you’ll need to provide the bank with the following:

• Identification documents (e.g. national ID card, biometric residence permit or passport) for all directors and partners
• Proof of address for your business
• Companies House registration number
• Estimated annual turnover for the business

Although it’s not required for a director or shareholder in your company to be a UK resident in order to register a business in the UK, it may be difficult to open a bank account if no one connected to the business is a UK resident. If this is the case, you can discuss your situation with your bank.

Unlike limited companies, partnerships and sole traders aren’t legally required to open a business bank account. In fact, if you’re just starting out, you may want to consider other options for managing your entity’s money.

How Much Does It Cost to Register a Business in the UK?

Registering a business in the UK is generally inexpensive. Online registration costs £12 and takes up to 24 hours. For an additional £100, you can have the registration processed on the same day. 

If you prefer to work with printed documents, you can send them through the post. This will cost you £40, and it will take up to 8-10 days for the registration to be completed. 

There are also a number of formation agencies that you can hire to do the registration process for you for an additional fee. 

Choosing The Right Payment Service Provider for Your New UK Business

Once your business is registered, you’ll want to be sure that you have a simple way to accept payments from customers within the UK and around the world.

Pay.com offers a flexible payment infrastructure that you can set up easily, even if you don’t have any technical experience.You can receive payments through a customized checkout page on your website or send your clients direct Pay Links.

With Pay.com, you can accept a wide variety of payment methods, including credit and debit cards, mobile wallets like Apple Pay and Google Pay, ACH transfers, and many more alternative payment options.

The Pay.com system is highly secure, with tokenization to keep your customers’ payment details safe and 3D Secure support to protect your business from fraudulent transactions.

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The Bottom Line: You Can Easily Register a Business In The UK

With the future of your business hanging in the balance and the various steps involved, registering your business in the UK can seem overwhelming. Following the 6 simple steps set out above will make the process as painless as possible.

Once you’re all set up and ready to go, you’ll want to provide your customers with the best possible experience. Using a simple, efficient payment infrastructure is a great way to increase customer satisfaction and keep them coming back.

With Pay.com, you can start accepting payments in just a few clicks. Not only is it convenient for customers, but it also makes your life easier as a business owner. Our easy-to-use system allows you to track each and every transaction, so you can stay in control of your payments at all times.

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FAQs

How much money is required to register a company in the UK?

Registering a business in the UK is not a costly endeavor. An online registration costs £12 as compared to £40 should you do the registration through the post.

Do I need to register my business name in the UK?

If you are operating as anything other than a sole trader or a partnership, then you are required to register your business with Companies House. Sole traders and partnerships must still register with HMRC for tax purposes.

Can I run a business without registering?

You may begin operating your business before the registration process is complete, but as soon as you start making a profit you do need to be fully registered.

Do I need to register my small business in the UK?

Yes, if you are operating a Limited Company (whether private or public) or a Limited Liability Partnership, you must register with Companies House no matter how small the business is. Sole traders and partnerships must register with HMRC.

Meet the author

Emily Kirschenbaum

Emily is a content writer with a special interest in fintech and business. She loves sharing her knowledge to help small businesses take their first steps towards success.

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