The UK always motivates and endorses entrepreneurship, with billions of self-employed company owners, freelancers, and sole traders.
However, starting a business in the UK can be a bit complex procedure, especially if you are from outside the European Union thinking of starting your own business or don’t know how to register your company in the UK.
Well, then you are certainly in the right place. Here, in this article, we offer a complete guide and advice on starting a new business in the UK, including company structures, taxes, and answers to your questions like registering a company in the UK.
But first, we should have a little knowledge about the business culture in the United Kingdom.
So, Let’s start discussing!
About The Business Culture In The UK
There are more than six million private sector businesses in the UK, and this figure is continuously growing. Since 2001, the number of companies in the UK has increased up to 2.4 million.
However, one-third of the UK business doesn’t have any employees, meaning they are self-employed or are in a partnership or sole traders. Over 15% of the UK’s workforce is self-employed.
According to the data from the national statistics, the most standard sectors for self-employed workers are- construction, technical activities, vehicle sales and repair, health and social workers, and administration. As mentioned, the EU and EEA citizens don’t need special permission to start a business in the UK with the expulsion of Bulgaria and Romania nationals. All through, the UK is still conferring its withdrawal from the EU so that the rules might change shortly.
Nevertheless, if you are a citizen from outside the EU or EEA, you may need a visa.
Business Types In UK
There are different types of business in the United Kingdom. While registering your company, you will have to choose the category that suits the most to your company.
And so it becomes essential to know more about these business options. Here we go-
1. Sole Traders
Any self-employed person in the UK who runs the business on their own is known as a sole trader. As a sole trader, you can have all the business profits, and you are only liable to all your business debts.
Even the freelancers come under the sole traders in the UK. Hence, to do freelancing in the UK, you have to register yourself as a sole trader to make sure that you pay the right amount of tax and national insurance.
2. General Partnership
This business category involves two or more two individuals who together set up a business or company. In these cases, the responsibility to run a business is shared equally between the members or partners. The profits are also shared equally between the partners.
3. Limited Partnership
This kind of partnership is very much similar to the general partnership. But in this type, there should be one general partner who generally runs the business and is responsible for any business debts. This partnership involves at least one limited partner whose contribution is financial.
4. Private Limited Company(Ltd)
Limited companies have a separate legal entity from the people that operate them. The limited companies need one director and one shareholder. But, the shares in the company can not be traded publicly.
5. Social Enterprise
It is a business type in the UK that invests in profits made by social, charitable, or community platforms, rather than sharing the profits among the shareholders.
Social enterprises are developed similar to limited companies and involve charities and cooperative societies.
How To Register A Business In UK?
To register a company in the United Kingdom, you have to follow the below-given steps-
1. Make Sure That You Can Legally Start A Business
Check if your immigration status allows you to create a new business in the UK. This includes ensuring if you have a necessary visa and residence permit.
2. Make a Business Plan
As an entrepreneur in the UK, you need to have a good business plan. This will help you decide whether your business is sustainable or not.
3. Decide a Company Structure
From the above-given options, choose a business structure that best suits your enterprise.
4. Decide on a Business Name and Address
It’s imperative to decide on a company name, and you need to have an address to register your business for tax purposes.
5. Register with HM Revenue and Customs
You have to register your business in the United Kingdom with HMRC for tax purposes.
6. Check Other Additional Rules for Your Business Category
Depending on your business structure in the UK, there can be some additional requirements like- license, permits, and insurance. Plus, you also have to follow some rules if you buy or sell goods. In the end, submit everything and your application by 3 pm in the registration office. And you are good to go.
Best of luck with your new business!