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

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

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

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Starting a business in the UK is exciting and daunting at the same time due to the numerous processes entrepreneurs must consider. Registering a company in the UK enhances your entity’s credibility and professional image. But how much will it cost to register your company with Companies House?

Your decision on the method and structure to incorporate your business will determine the cost. This guide will provide details about business registration costs in the UK and the required procedures.

UK Business Registration Costs

The cost of registering a business in the UK is based on the incorporation method. The price ranges from £50 to £71. You can choose between the £50 online or £71 postal application with Companies House.

UK business registration costs

An entrepreneur may also register via accountants or company formation agents who charge slightly more but offer additional services.

When registering your business with third parties, you must consider costs such as professional advice and supplementary services like registering for trademarks or patents, logo design, virtual offices, and many more.

Additionally, different costs will arise considering the company structure. The only requirement for sole traders is to register for self-assessment with the HM Revenue Customs.

The advantage of a sole trader is the simplicity and affordability, unlike most other business structures that require a formal incorporation process.

The fee for a limited liability partnership (LLP) is not expensive at £71 but entails submitting a paper application.

Further charges apply for additional services that you will require. If you need same-day incorporation, you will be charged £78. This service is essential for those who need their company status to be up and running as quickly as possible.

You can choose to incorporate your company online with Companies House and the only fee you will be charged is £50. However, consider registering it with a company formation agent if you want a hassle-free process.

To register a business in the UK, you require a registered office address which you can get from company formation agents like Icon Offices and benefit from affordable registration costs and supplementary services such as professional business addresses that cost you just £0.99 per week.

They offer packages that suit any business and still benefit from supplementary services. If the entrepreneur tenders all the relevant documentation, they will see that the company register is completed within one business day. 

If you decide to set up a business, you must set aside funds for such purposes. That will save you from any financial burden and help you prepare yourself financially.

Steps to Register Your UK Business

Let’s understand the steps to take when registering your business in the UK. To have a smooth registration process, you should:

Choose a Business Name

A business name is what gives the company an identity. The name has to be unique and distinct so as not to infringe on already existing names.

Choose a business name

In the UK, there are company name rules business owners must understand before settling for a brand name. The rules associated with choosing a company name include:

  • The name must be unique and not similar to existing companies’ names.
  • Insensitive words or expressions should be avoided. This includes words implying a connection with the government, suggesting business pre-eminence, and words that could be an offense.
  • The name must end with either ‘limited’ or ‘Ltd’ unless your company is a registered charity.
  • Must not be the ‘same as’ another company’s name.  

Choose a Company Structure

Decide on a legal structure for your business. Check your company goals, financial requirements, limited liability, and legal requirements to choose the right company structure for your business. In the UK, there are many common company structures available including:

  • Sole trader: This is a company structure where the individual is required to manage the company. For sole traders, profit and losses belong to them, and they are liable for the liabilities. This exposes their assets.
  • Limited Liability Partnership (LLP): Limited Liability Partnership (LLP) offers limited liability to partners who want to form a business together but limit their liability to the amount they have already invested in the company.
  • Limited companies: This structure is a limited company and a distinct entity where the directors and company owner get limited liability. The liability of shareholders is limited to the investment of the company. This means that they are outside the control of creditors and the law.

Complete Necessary Documentation

The selection of directors and shareholders of the company follows after this. Here you are deciding your company structure i.e. who will be the directors and shareholders of the company.

Shareholders own the company through shares, while the director’s responsibility is running the company operations, submitting accurate finance records, and ensuring the succession of the laws.

Your company must, at least have, one human director. A corporate body can also be directors and shareholders. Directors do not need to be UK residents.

You qualify to be a director if you are at least 16 years old, not undischarged with bankruptcy, and you have not been disqualified as a company director.

necessary documentation

Shareholders can vote on company matters. Should you have only one shareholder, your holding will represent the entire company. A company is not required to have a maximum number of shareholders.

Register with Companies House

The next step after securing your company name and all necessary paperwork and defining your structure is the registration with Companies House.

Understanding legal regulations becomes essential when registering a company in the UK because the process requires both complexity and considerable time.

Company formation agents will manage your paperwork before submitting it to Companies House if you choose their incorporation service.

It will also make things much easier for you as a business owner and your company will be incorporated within 1 working day and enjoy other added services.

The application may take 1 to 2 working days to process at Companies House.  

HMRC Registration

Sole traders must register for Self-Assessment with HMRC as their primary reporting requirement. Business owners must register with HMRC immediately after their business formation to prevent facing penalties.

If you are a sole trader, you must register by October 5th of the second tax year of your business (the tax year is between 6 April and 5 April the following tax year).

Once you’ve completed incorporation with Companies House, they will issue a Unique Taxpayer Reference (UTR) number by post, which will be required for all dealings with HMRC for limited companies.

Value Added Tax (VAT) is also compulsory for limited companies if, in 12 months, they make a business turnover of over £90,000 or will make one in 30 days.

Finally, entrepreneurs should research the cost of registering a business in the UK. This is extremely important in financial planning and avoiding anxiety as you register.

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Dinesh Kumar VM
As a passionate blogger, I write about SEO, Digital Marketing, WordPress, Web Hosting, and Business-related topics. I share my experiences and insights in different niches through my blogs, helping others navigate and succeed in the digital world.