How To Set Up Company In UK: Comprehensive Guide For Beginners
Nothing is more satisfying than the freedom of being your boss and pursuing a course you believe in. These are some of the perks that come with starting a company. There are other things to enjoy, like an expanded income stream, better credibility, and tax benefits unavailable for sole entrepreneurs.
Investing in another country is easier than ever as the world opens up. But, not all countries are suitable for investment. Ideally, you want a place with a diversified market, excellent infrastructure, adaptability to market shifts, favourable tax policies, and a friendly business environment. One country that pops up in mind checking all the boxes is the UK.
A skilled worker visa, often referred to as a work visa or employment visa, allows individuals to live and work in a foreign country based on their skills, qualifications, and employment opportunities. The requirements, application process, and types of skilled worker visas vary depending on the country’s immigration laws and regulations. Here’s a general overview of skilled worker visas:
As one of the best places to run a business by the World Bank, there’s no doubt about what the UK offers. With its potential out of the way, you must first deal with the ugly part- company formation. So, how do you register a company in the UK? Here’s a comprehensive guide.
Who Can Start a Company in the UK?
Thanks to the UK’s open policy welcoming business people, anyone can start a company in the UK. Surprisingly, you can do it as an individual, group, or corporation, even as a non-resident and resident outside the county.
However, depending on your business type, you must still meet certain eligibility requirements. For instance, the company must also have a physical UK address where official communications from government agencies like Companies House will be sent.
To understand better the UK’s legal landscape in company formation, learn more about setting up a company in UK.
1. Choose A Business Structure
Once you have a viable idea, it’s time to deal with the technical aspects. The first on the list is choosing a business structure. This is a crucial step, considering that the choice affects critical aspects of the business, such as liability and tax obligation
In the UK, you can choose between two types of companies;
Private Limited Company (LTD)
This is a limited liability company whose shares are not publicly traded on the stock exchange. That means it raises capital from owners or private equity. It is operated by directors chosen by the shareholders and has at least one shareholder and a maximum of 50.
Public Limited Companies (PLC)
In the UK, a PLC is a limited liability company with shares listed and publicly traded on the London Stock Exchange. At least three directors head the company. It raises money by offering shares publicly and must routinely publish financial reports for shareholders to assess.
Being limited companies, both of these options operate as separate bodies from their owners. That means their assets can not be sold to pay off the company’s debt in case of bankruptcy.
2. Register Your Company
- Visit the government registrar- Companies House
- Search your business name to confirm its availability
- Provide the details of an appointed director who should meet the Companies House qualification
- Provide details of shareholders and their shareholding
- Provide a UK-registered office physical address
- Pay the £12 registration fee by credit or debit card
- The company should be registered within 24 hours, and you’ll be issued a certificate of incorporation
3. Open a Business Bank Account
Setting up a business bank account is important to transact smoothly and avoid mixing transactions with your finances, which helps enforce the limited liability aspect. Fortunately, the UK offers plenty of bank options with favourable terms for international businesses.
A business bank account makes getting funded, audited, and work visas easy.
Pick a bank of choice with the ideal services and features, such as credit access and integrated accounting, to make your work easier.
4. Register for taxes and Insurance
Taxes are unavoidable when running a company, so take your time to understand your tax obligations. The common taxes in the UK for corporations include 20% VAT, 25% corporation tax for over £50,000 in profits, 20-45%income tax, and National Insurance contributions (NICs).
The amount of tax you pay mostly depends on the turnover, and as an employer, you are responsible for remitting payroll taxes and respective contributions. It helps to seek guidance from an expert to fulfil all your corporate and personal income tax responsibilities and maintain compliance, which attracts penalties.
5. Get Licenses and Permits
Some businesses, like selling food or playing music, require permits, certifications, and licenses. Research the applicable ones to your company and obtain them to ensure your business operates legally.
6. Stay Compliant
Once you have everything ready, it’s time to launch your business and roll out effective marketing strategies to sell your products or services. But, one more important thing- always stay compliant.
First, stay informed of the latest regulations by educating yourself on official government websites. You can also participate in industry events and join associations for valuable industry insights on trends and regulations. This will allow you to fulfil legal obligations like filing taxes on time.
Second, all critical business records must constantly be updated. Maintain important business documents and accurate financial records of income and expenses as the law requires. Seek advice from legal professionals like accountants and lawyers who understand the regulations better than you. Then, review company practices regularly and conduct audits to ensure its complaints and identify vulnerabilities.
Lastly, leverage modern spreadsheets and accounting software that make staying compliant easy. Routinely reconcile accounts to resolve errors and ensure they agree. Also use advanced data protection techniques to avoid data breaches and lawsuits .
Conclusion
The UK is a perfect investment destination because of its excellent customer base and good standings with fellow EU countries. More than ever, it offers excellent opportunities for entrepreneurs anywhere in the world thanks to its friendly policies that allow businesses to thrive.
With all you need to know about setting up a company in the UK, you can look forward to a smooth registration process. You don’t need any experience to launch your company successfully in the UK; follow these easy steps, and your company will be up and running within a few months.
