How Much Does it Cost to Incorporate a Company in the UK in 2024?
Incorporating your company as a new business owner is vital. This doesn’t only help enhance your business credibility but it also creates an avenue to secure loans from banks, attract investors and partners and much more.
Unlike in previous years, there has been a substantial change in the price of incorporating business now. While these prices could be significantly high, there are more benefits to enjoy as a registered business within the UK. In this guide, you will get to know how much it will cost to incorporate a business in the UK in 2024 and a lot more.
How Much Does it Cost to Incorporate a Company in the UK in 2024?
To incorporate a company in the UK in 2024 costs 50 pounds. Initially, this fee used to be 12 pounds, however on May 1, 2024, the Companies House announced the new incorporation price to be 50 pounds. For same-day incorporation, the price is now 78 pounds. Apart from that, other related company filing fees have also increased. The confirmation statement which used to be 13 pounds is now 34 pounds.
To change a company name now costs 20 pounds if you are filing online, however, paper processing is 30 pounds. The voluntary strike-off price is 33 pounds online and 44 pounds with paper. If you are incorporating your business from overseas, you would require a registration price of 71 pounds which used to be 20 pounds. Also for an overseas company willing to change a company name, the price is now 30 pounds.
Additionally, for other business structures and entities including Limited Liability Partnerships, Limited Partnerships, Community Interest Companies, Overseas entities and so on, there has been an increase in the price of incorporation, change of name and so on.
Notably, there haven’t been any other changes in the Companies House pricing since 2016. However, the changes will not only be beneficial to the body itself but to every business incorporated within the UK.
Why the Price Changes?
In a bid to combat fraudulent and laundering activities, prevent crime and improve investigation patterns, the Economic Crime and Corporate Transparency Act has granted the Companies House some power. This will in turn allow the Companies House to put in place measures to eradicate criminal acts, improve the efficiency and accuracy of companies register, prevent false businesses from gaining entry into the system, create a more healthy business environment for all registered companies and so on.
The Companies House had therefore made it known that the price increases are not solely for profit maximisation as they are intended to be utilised in carrying out the new services including investigation, enforcement, scrutiny and lots more.
How the Price Changes will Influence Businesses
Whether you are a new business owner looking forward to incorporating your business soon or you’ve been in the system for years, there are a number of ways in which this recent adjustment could influence your company.
1. Financial Planning
With the recent price adjustment, businesses may need to recheck and analyse their company's financial planning process to accommodate the substantial price increase. This will include taking into consideration the incorporation, filing, name change and other regulatory fee charges attached.
2. Compliance policy
As the prices increase and the Companies House grants more power to carry out investigation and enforcement activities, businesses should be prepared to face more compliance burdens. This would significantly mean that businesses might require more time and effort to meet up with deadlines, meet up with compliance requirements and prevent penalties. While large businesses might not really experience this, small businesses with little resources would need to be really intentional to scale through this.
3. Digital Filing Process
While it has been noted that paper filing processes are much more expensive than the online ones, many businesses will be forced to carry out their incorporation, name change and other filing process online as it is not only cost-effective but convenient.
4. Healthier business environment
As the Company House is on a mission to combat all criminal acts, this means many fraudulent activities will be prevented. As such it will be difficult for this fraudster to obtain the company’s information on the Companies register. Moreso businesses can be assured of having accurate details on the Companies House website.
Why You Should Still Incorporate Your Business in 2024
Despite this major increase in incorporation price, every business within the UK should still consider registering with the right body. Apart from the fact that it helps your business stay in compliance, there are a lot of other reasons you should incorporate your business.
1. Liability Protection
When your business is incorporated, it is regarded as a separate legal entity on its own. As such the business can go into legal contract with other businesses or individuals, sue and be sued in its name. As such if your business incurs debt, the business in its name is expected to pay up the debt and not the owners. For a sole proprietorship that isn't usually incorporated, separating business identity from the owner's own is difficult and as such the owners don't have liability protection. For incorporated business owners, therefore, their personal assets and properties are usually protected against business debt.
2. Funding opportunities
Banks and investors prefer to invest in businesses that are incorporated than the ones that aren’t. Because incorporated businesses are recognized as separate legal entities, they have the chance to go into contract with other entities. Moreover incorporated business operates and manages business funds in the business name, this specifically increases their credibility and reputation. As such banks are willing to offer loans to them and investors are also ready to contribute to such companies.
3. Ability to raise capital easily
When your business is incorporated, it becomes much easier to generate funds for the business through the selling of shares. This means as you sell more shares for the company, you gain more money to expand and build the business. Apart from the fact that you wouldn’t go through the struggle of lack of capital, there are more chances that the business will grow and flourish in no time. Many sole businesses go extinct because of the lack of capital to properly manage the business from the start, so if you’re able to tackle that, you stand a great chance of ensuring business success.
4. Succession planning
Unlike a sole proprietorship or partnership, succession planning is more realistic with incorporated business. Even if one of the owners retires or dies, the chances of the business existing thereafter are high. For a one-man business, on the other hand, a business could struggle for existence once the owner dies.
5. Ownership transfer
Transferring ownership of a business is much easier for an incorporated business than an unincorporated one. Although it could involve some legal work and processing however, it is more efficient and effective. If for example, you wish to transfer your business ownership to your children when you get old, then incorporating the business from now makes the process easier later in the future.
6. Credibility and reputation
Individuals and other businesses are more willing to partner with companies that are incorporated than the ones that are not. By incorporating your business, you gain more trust from consumers, lenders, employees, suppliers and lots more. This could open more doors for your business when you least expect it. Moreover, most sophisticated businesses, organisations and individuals may be willing to go through your certificate of incorporation before going into a legal contract with your company.
7. Company name protection
Once you have your business incorporated, you automatically have it registered in the Companies House and as such it will be made available in the Companies register. With this, no other company can choose the same or similar name as yours for incorporation. Without incorporating your business, another new start-up could use a business name and so you won’t be able to register with the name again.
8. Tax benefits
There are many tax benefits and deductions that are available to incorporated businesses as compared to one-man businesses. You may also be qualified for some local and state incentives which could aid your tax payment. If you incorporate your business as a limited company, you may have the chance to choose between paying income or corporation tax.
Even in the midst of these price changes, company incorporation still remains an important step for every business to take and so you shouldn’t delay the process. There is no guarantee or chance that the incorporation price will come back to its initial price, so you should consider incorporating your company right from now.
Form Your Company with Incorpuk Today
At Incorpuk, we will help you through the company formation process and file your confirmation statements to help your business stay compliant. Whether you're a UK resident or a non-UK resident, our team is ready to provide guidance and help you establish your company in the UK. Contact us here today.
Conclusion
Although this recent price adjustment could have a major influence on new and already established businesses. Whether or not to incorporate your business should not be a topic of debate as there are more benefits to be enjoyed when you register your business coupled with the new services that will be rendered by the Companies House.