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Starting a business can be an exciting but daunting process. If you are looking to start a company in the UK, it’s important to know the different types of businesses available and the steps you need to take to register your business. Let’s explore the different types of businesses in the UK and the process of registering them.
Types of Businesses in the UK:
Sole Trader: A sole trader is a self-employed individual who runs their own business. This is the simplest form of business structure and it’s easy to set up. As a sole trader, you are responsible for all aspects of your business, including taxes, liabilities and debts.
Partnership: A partnership is similar to a sole trader, but it’s owned by two or more people. Each partner is responsible for their own taxes, liabilities and debts. It’s important to have a partnership agreement in place to define the roles and responsibilities of each partner.
Limited Company: A limited company is a separate legal entity from its owners. This means that the company has its own legal identity, which is separate from its owners. As a result, the owners of a limited company have limited liability, meaning that their personal assets are protected if the company runs into financial trouble.
Steps to Register a Company in the UK:
Choose your business name: Before you can register your company, you need to choose a name. Make sure that the name you choose is unique and not already in use. You can check the availability of your chosen name on the Companies House website. Don’t forget to consider if there is an approprite domain name available!
Decide on your business structure: As mentioned above, you need to decide on the type of business structure you want to set up.
Register with Companies House: You need to register your business with Companies House. You can do this online or by post. You will need to provide details such as your business name, address, directors and shareholders.
Register for taxes: You will need to register your business for taxes, such as VAT and Corporation Tax. You can do this on the HMRC website.
Set up a business bank account: It’s important to have a separate bank account for your business. This will make it easier to manage your finances and keep track of your expenses. (Personally I use Starling and have found them excellent!)
Get business insurance: It’s important to have insurance to protect your business. Depending on the type of business you have, you may need different types of insurance, such as public liability insurance or professional indemnity insurance. (Personally I use Policy Bee who seem to be very competitively priced with a good range of cover options.)
Keep records: It’s important to keep accurate records of your finances, such as income and expenses. This will help you when it comes to filing your taxes.
Starting a business can be challenging, but with the right guidance, it can be a rewarding experience. Whether you choose to set up as a sole trader, partnership or limited company, it’s important to understand the different types of businesses and the steps you need to take to register your business. By following the steps outlined above, you can set up your business in the UK with confidence.