8 Simple Steps to Register a Company in the UK in 2024

In recent times, there has been a rise in the number of companies being registered in the UK.

This rise is a result of more innovative ideas coming into place and a lot of young entrepreneurs who are exploring opportunities present in the United Kingdom.

The UK has been known to attract a lot of investors and entrepreneurs, making it a hub for both small and medium-sized businesses.

This increase in the company helps in improving the economic condition of the UK. A private limited company is the most common form of a business entrepreneur in the UK. Incoporp in this article, explores steps to register a company in the UK.

Here are eight steps to register a company in the UK in 2024.

1. Choose Your Company Name

Before starting the company registration process, as an entrepreneur, one of the most important things to consider is your company name. Your company name is your company's legal identity. The name will appear in all your company's paperwork, such as the incorporation certificate, tax returns and invoices of your company. It is important to give your company a good name and one that represents your company's business activities so your audience will have an idea of what your offers are. Immediately, they come across your company's name.

It is also essential to put at the back of your mind the Company's House rules for naming companies. One of the most important rules is that your company cannot have the same or any similar name as another company. In order to avoid any issues relating to using the same or similar name with another company, you can use the company name availability checker provided by Companies House.

Aside from having a different and unique name, your company name must not be offensive. These are certain words which are regarded as sensitive and are not allowed to be used in naming companies except with permission from Companies House. Some of these sensitive words are 'accredited' 'assurance' and 'co-operative'. These words are not allowed to be used by companies' houses because they could give people the wrong impression about your business and suggest to the public that the industry has certain qualifications it does not have.

Another consideration when choosing a company name is that you cannot use a name that has been an existing registered trademark. A registered trademark is a name or symbol that has been legally claimed by a company or organisation, and using a name that has already been trademarked will attract legal sanctions.

The final thing to put into consideration is that you are mandated to pass the word limited or ltd if you are registering for a private limited company. This rule cannot be exempted and no condition can make a private limited company omit the ltd at the end of the company name.

According to the above rules, once you have settled on the company name to use, you can also consider using a trade name for your company. A trading name is a name used by your company for trading and your clients know you by. A trading name can be different from your company name, and you can still register your trade name differently from your company name. You cannot use another company's trade name or company name for yours.

As a company, choosing a trade name is completely optional and many companies only choose to use their registered name when dealing with clients and conducting business. However, if you feel your company's trade name will help in branding or image, you can consider registering a trade name for your company.

In the same way, there are rules to naming a company, there are also rules to follow when giving your company a trade name. You register your trade name in the same way as a company name. Your trade name must not be the same as any other existing company's name or trade name. Once you have registered your trade name, you should always remember that both your trade name and your company name should appear on all paperwork of the company, including invoices, contracts and any other document related to your company.

You should always take your time to choose a company name that reflects your company's business activities and also if you want to register a trade name, it should be a unique name that portrays the image of your company to outsiders.

2. Get a Registered Address

It is also mandatory to choose a registered business address before you can register your company with Companies House. Your company's registered address is the official location where all government agencies such as the Companies House, HMRC, the pensions regulator, and other authorities will send all of their formal correspondence related to your business. Because of this, it is very important to select a suitable address for your company to ensure there is proper communication with these government agencies.

The most straightforward option to use for your registered address is your office address. If your company has a physical office space, this will be preferable and advisable since it will keep all your business matters centralised. However, if you work from home or run a small business and you do not have a separate office, you can use your home address as your company's registered address. This is a convenient option for entrepreneurs who work from home and also startups who are yet to get an office.

If you want to keep your home address private and would not want all official documents delivered to your residence, you can choose to explore other options. There are many accountants and third-party providers that offer registered office services. A third-party registered office allows you to use a different address for your company and also protects your privacy thereby offering more professionalism.

It is always important to keep in mind that the registered address must meet certain legal requirements. Most importantly, the address must be located in the same country where your company is registered. For example, if your company is registered in England and Wales, your registered address must be physically located in either England or Wales. If your company is registered in Scotland or Northern Ireland, then your registered address must be in the corresponding country.

The requirement ensures that your company operates within the appropriate jurisdiction and can easily communicate with relevant authorities. Whenever you are deciding on the location of your registered address, it is very important to make sure that the location you choose complies with the territory of registration.

Also, the registered address must be a physical address. It cannot be a P.O. Box except the full physical address of the P.O. Box is provided. This is because the authorities need a reliable address to send official letters and they must be confident that the address is valid and accessible for legal or official purposes.

3. Select Your Company Director(s)

The requirement for every company during incorporation is that they must appoint at least one director. A director of a company is responsible for the management and operations of the business, ensuring that the business follows the law, and the company's obligations are fulfilled. Although there is a minimum requirement for directors, which is one, there is no maximum requirement for directors. That means a company can appoint as many as possible directors in their company.

The director of a company can either be an individual or another legal entity, such as a limited company. However, even if a company decides to appoint companies as their directors, there is a mandatory requirement that at least one of the directors should be an individual. This is to ensure that there is an individual who is directly accountable for the company's actions. In any case, the company has only one director; it must be an actual person and not a company.

For many small business owners and contractors who run their businesses through a limited company, it is common to appoint themselves as the sole director. By taking the role of the director, they can maintain full control over their company, making key decisions and being responsible for the day-to-day management of the company.

When you appoint directors for your company, you must provide Companies House with specific details about each of your company's directors. This information includes their full name, nationality, date of birth, and their residential address. These details are required by the company's house to ensure that the identity of the company's director is known and the directors can take accountability for the actions of the company.

If as a director, you feel uncomfortable sharing your home address publicly as a part of the registration process, there are ways you can protect your privacy. Instead of using your home address, you can choose to provide a service address for the directors. A service address is an address where official documents and information for the directors can be sent, and it can be the same as the company's registered address. This allows directors to keep their resident addresses private while still fulfilling the legal requirements to provide an address for each director.

In the past, it was also a requirement for companies to appoint a company secretary to handle administrative duties and ensure compliance with legal obligations. However, this is no longer a legal necessity for most private limited companies. While appointing a company secretary can still be beneficial for larger businesses, it is no longer compulsory for companies, since smaller companies can operate without a secretary and handle these responsibilities internally.

Duties of a Director

As a director of a company, various responsibilities come with the position. The Companies Act 2006, which is the key piece of legislation governing companies in the UK, sets seven important duties that every director must follow. These duties are to ensure that the directors act in accordance with the interests of their company and also maintain a high standard of professionalism and integrity.

1. The first duty is to ensure that, as a director, you run the company based on the rules set out in the company's memorandum and articles of association. These documents serve as a constitution of the company, containing every time on how the company should be managed, and how rules are dispersed within the management of the company.
2. The second duty is to act in the best interest of the company at all times. This means that you have to put the company's needs and goals ahead of any personal interests and relationships at all times. As a director of a company, you must prioritise what is beneficial for your company and its shareholders, even if it requires you to make a difficult and unpopular decision and also make an independent judgement.
3. Thirdly, you are expected to perform your duties to the best of your abilities. Doing your best means staying informed about the company's operations, understanding the financials, and being proactive in addressing any challenges that may arise. As a director, you are entrusted with the leadership of the company and your effort and competence in the role can directly impact the success or failure of the company.
4. The fourth duty is avoiding any conflict of interest. A conflict arises when your interests clash with those of the company, which can eventually lead to biased decisions that may not be in the company's best interest. For example, owning shares in two different companies that are competing might influence your decisions in the company. As a director, you should avoid these scenarios.
5. The fifth rule is you must decline gifts or benefits from third parties that could influence your decision-making. Accepting gifts or perks, such as an expensive holiday from a supplier, might put you in a position where you feel obliged to give them preferential treatment, even if they are not the best choice for the company.
6. The sixth rule is that you must always disclose any situations where you might personally benefit from a transaction involving the company. For example, if your company is renting an office that you own, you must inform the other directors of this arrangement. Transparency is very important in preventing any misunderstandings or accusations of unethical behaviour.
7. The last and seventh duty is that you are expected to act with professionalism and integrity always. As a director, your actions set an example for others within the company and maintaining high ethical standards is important for building trust and credibility with your stakeholders, employees and clients.

Failure to meet these duties as a director can have consequences. If you breach any of these responsibilities, you could be disqualified from serving as a director of the company for up to 15 years. In more severe cases, where your actions have resulted in significant harm to the company or are considered unlawful, you could face financial sanctions or imprisonment.

4. Company Share Structure

Determining the share structure of a company is very important in the startup stage of your company before incorporation. Shares are described as units of ownership in a company and the number of shares an individual or entity holds directly influences several important factors. Including how much control the shareholders have in the company's decision-making processes, how much profit they are entitled to should the company face financial difficulties, and how much pet liability they may take on themselves based on the value of shares.

The shares of a company represent ownership and this ownership grants shareholders certain rights in the company. The more shares an individual owns in a company, the greater influence they have over the company's strategic decision-making. For instance, shareholders have voting rights at company meetings, allowing them to influence decisions like electing directors or approving major company transactions.

Also, the percentage of shares a person owns determines the proportion of the company's profits they are entitled to, which is in the form of dividends. Another important aspect is to understand shareholders' liability, which is often limited to the value of shares they hold. So for instance, if someone owns shares worth £100, their maximum potential loss in case the company becomes resolved would be limited to the worth of their shares.

The easiest shareholding structure is the one where the company has only one shareholder. The individual owns 100% of the company shares, giving them complete control over the business and all its decisions. In this case, the individual is also entitled to 100% of the company's profits. This one shareholder structure is very common with small businesses that are run by a single person, ensuring that the owner has total control over the business and doesn't have to share their decision-making power with any other person.

However, in some cases, some entrepreneurs may choose to give their shares to other individuals, such as business partners or spouses. When shares are divided among more than one shareholder, the profit is also distributed in proportion to each person's ownership. For instance, if there are four shareholders in a company and each of them owns 25% of the company's shares, each of them would receive 25% of any declared dividends. In the case of a £10,000 dividend, each shareholder would receive £2,500.

In some situations, individuals choose to share ownership of their company with their spouse, even if the spouse is not directly involved with the day-to-day running of the business. This, however, can offer a tax advantage, especially if the spouse pays tax at a lower rate than the primary owner. By splitting the dividends between both spouses, a part of the income can be taxed lower, which can result in tax savings. However, it is important to note that for this to be possible, the couple must be married and living together, and the shares that the spouse owns must be ordinary shares, granting them the same right as the other shareholder.

Another method you can structure your share ownership is by creating different classes of shares. Instead of having ordinary shares, each share can have its own set of rights and privileges.

Ordinary shares, as mentioned earlier, are the most common type of shares and grant the golfer voting rights and the right to share in the company's profits. However, you can also have a preference share, which may give the holder priority when it comes to receiving dividends, which often offer a higher percentage of the company's profits.

The trade-off is that the preferred shareholders do not have any voting rights, which means that they cannot participate in the company's decision-making processes. This type of shareholding is attractive, especially for investors who are more interested in the financial returns of the company than having a say.

Management shares are also another option for shares. These types of shares give the holders more power in terms of voting rights. For example, if an individual holds management shares, they have a greater influence over the company's decisions, even if they do not have the majority of the company's shares. This type of share is often used to maintain control in a company where the ownership is spread among multiple investors. The founders or key decision-makers still want to retain the upper hand in decision-making.

Whatever share structure you choose for your company, it is important to understand the long-term effect of the decision on your business. It is also advisable to consult with a qualified accountant or legal advisor as they can offer expert guidance on the best and promising approach for your business situation. Your accountant can also assist in helping you to structure the shares in a way that is not only tax efficient but also aligns with your business goals.

Once you have concluded your company's share structure, you will need to submit the relevant information to Companies House, which is the registrar of companies. You will need to provide the name and address of each shareholder, the number of shares they will hold, and the class of shares they will own. The company houses require three pieces of personal information for each shareholder. These can be passport numbers, national insurance numbers, or even the last three digits of their phone number.

Every year, the company must submit a confirmation statement to Companies House. This statement helps to ensure that all information regarding a company's shareholding is kept up-to-date and correct. Even without any changes in the share structure of your company, you must file a confirmation statement every year and failure to do this can result in penalties.

5. Articles of Association and Memorandum of Association

When setting up a limited company, the two most important documents which serve as the constitution for the company are a memorandum of association and the articles of association. These documents are important to form the company and also in management. The both documents play a role in defining the company's purpose, structure and internal processes.

The memorandum of association is an important document that officially establishes the company and outlines its objectives and purpose. It contains important details about the business and its shareholders, who are often referred to as subscribers.

The memorandum includes a declaration that the shareholders intend to form the company along with the company's official name and registered address. It also provides a list of all the shareholders, the number of shares the company has sold or issued and their values. The document also states the nature of the company's business activities and also the industry.

The memorandum used to be filed as a standalone document. It has now been simplified for businesses registering online. When you register your company through the government online portal, you can simply enter the relevant details for each shareholder directly into the system.

This method helps eliminate the need for a separate memorandum document, and you can confirm that the memorandum has been authenticated by ticking the checkbox as part of the online registration process. However, if you are registering your company by post, you will still need to provide the memorandum as a formal document.

Another important document is the Articles of Association, which functions as a set of laws for the company. It contains details of the rules and procedures for how to run the company, covering a wide range of topics, such as the powers and responsibilities of the directors, how decisions are made and how voting will take place during shareholder meetings.

This article of association also contains the guidelines for distributing dividends and other financial matters. The articles of association serve as the constitution for the operation of the company.

Most new businesses use the government's Articles of Association, which is a standard template that works well for most typical companies. The government's template provides a set of rules that cover the basic requirements for operating a limited company in the UK. For a lot of entrepreneurs, the model articles of association meet their demands, especially in cases where the company's structure and operations are relatively simple.

In other cases, business owners may choose to amend the articles of association to reflect the needs and goals of their company. For example, they might want to include provisions for how the new shares will be issued or they might need to address some specific governance rules that are not in the model articles. When business owners use amended articles, they have a greater chance of flexibility to adjust their rules to fit their business.

However, it is important to note that companies that choose to use an amended article of association have a different company registration process. They have to fill up the company registration form(Form IN01), fill in all the necessary information and submit it by post to Companies House. The process, however, can be time-consuming, although amended articles of association offer the company flexibility. Whether you are going for model articles or an amended one, it is important to always go through it carefully before submitting it to Companies House.

6. Choosing Your SIC Code

When you are registering for your company, you must complete the sic code selection for your company. The SIC stands for Standard Industrial Classification, and these codes are used by the government authorities to classify businesses based on the type of industry they operate in.

The SIC system classifies businesses by assigning them one or more unique SIC codes. The SIC codes function in grouping these companies that operate in similar industries or sectors, which makes it easier for statistical purposes and also for regulatory bodies to understand the nature of business that a company does.

Every industry has its own unique set of SIC codes and, as a new company, it is important to choose the SIC code that reflects the activities of your company. In most cases, selecting just one SIC code is enough to describe the business activities of the company. However, in other cases, depending on the nature of your business, you are allowed to choose up to four different SIC codes if your company's operations are in more than one field. This is useful, especially for companies that operate in multiple sectors.

For contractors, particularly those that are working in the technology sector, several SIC codes may be particularly relevant. The SIC codes are part of Section J, which includes information and communication activities. Some of the most commonly used SIC codes for contractors in this area include:

1. 62012: This SIC code is for business and domestic software development and is suitable for companies that are focused primarily on developing software for businesses or individuals.
2. 62020: This SIC code is for information technology consultancy activities. The code is often used by businesses that provide consultancy services helping other companies with their technology-related problems or needs.
3. 62030: The SIC code is for computer facilities management activities. If your company manages or maintains computer systems and infrastructure for other organisations, this code will be appropriate for you.
4. 62090: Other information technology service activities. This is regarded as a more general code that covers a wide range of IT services that may not fit appropriately into the other categories.
5. 63110: Data processing hosting and related activities. This SIC code is mainly for companies involved in managing, processing, or storing large quantities of data for describing their business.

It is very important to take your time to review the lists of SIC codes and to choose the appropriate one(or more than one) codes that fit your business activities. As a company, selecting the right SIC code helps to comply with regulations and also ensure that your business is correctly categorised by authorities.

If you do not choose a code that appropriately fits your business or if your company diverts into a new business activity or industry, you should always understand that you are not Locked to your SIC code and you can always update or change your SIC codes at any time by just submitting a confirmation statement to Companies House.

A confirmation statement is an annual filing requirement that allows a company to confirm and update your company's information, including its SIC code. If your business activities change over time and you realise that they no longer fit in your company's SIC code, you can correct your SIC code when your confirmation statement is due.

This means that you do not need to rush changing your SIC code. If it doesn't fit your business, you can wait until your confirmation statement is due to file any updates. This can help reduce administrative burden and give you time to settle into your business operations before making any adjustments to your classification.

It is important to choose the correct SIC code even if it seems like a very small task, it is an essential step for your company to take. It helps your business to be accurately represented in government records and thus affects how potential clients and partners view your business. Whether your company develops software, provides consultancy, or manages computer systems, selecting the appropriate SIC code will help your company to be classified properly.

7. Business Bank Account

As a business or company, having a bank account is very important, whether your business is a startup or an already established business enterprise. One of the major reasons for opening a business account is that it allows you to separate your finances from your business finances.

This separation is important because it simplifies the process of tracking income, expenses, and profits while providing clarity when it comes to financial matters. For example, having a business bank account makes it easier for your business to manage its cash flow and also it will help you have a clear picture of the coming in and going out of money for the business.

Also, using a business bank account helps you to maintain accurate financial records. You can keep proper track of your invoices, taxes, payroll sales and revenue reports.

This will help you to stay organised and also make your bookkeeping and accounting processes more efficient. For example, when you want to submit a tax return for your business, having a dedicated business account makes it easier to pull together the relevant financial information. As a company, you can easily identify business-related expenses and income which reduces the chance of errors and missed deductions.

Another importance of having a business account is that it gives your company a higher level of credibility and professionalism. When your clients, customers or investors see that you have a dedicated legitimate business account for conducting your company's financial transactions, they are more likely to take your company seriously.

On the other hand, if you use a personal bank account for business transactions, it may give others the impression that you are not fully committed to the business or that your business is not well established. A business account provides a sense of trust and gives confidence to anyone who wants to do business with you.

Having a bank account is often a requirement for working with certain third parties such as lenders suppliers or the government. For instance, if your company or business wants to apply for a business loan, most lenders will require you to provide an official business bank account for all the transactions. Similarly, when your company or business is dealing with HMRC or any government body, having a business account is mandatory. It also makes it easier to process payments and manage any financial obligations your business may have.

Many banks offer special services for business accounts, such as merchant services that make it easier for you to accept payment from your customers. These services are, however, invaluable for businesses that handle large volumes of transactions. Also, with a business account, you may be eligible for additional financial products like business credit cards, overdrafts and loans that can support your company's growth.

In summary, having a business account is more than just meeting the Companies House regulatory requirements; it is more about improving your financial management, projecting professionalism and building trust with your customers and business partners. It helps to establish a strong foundation for your company and says you up for success.

How To Open a Business Bank Account in the UK

Opening a business account in the UK is an important step for any entrepreneur looking to manage their finances effectively. To open a business account in the UK, you will first need to gather some important information and documents that prove your company's registration and your identity.

The documents needed include your company registration certificate from Companies House, as well as the identification document such as your passport or driving licence. You will also need to provide proof that your company is registered and provide the registered address which could be in the form of a bill or bank statement.

Before choosing a bank, it is good to research and compare the different business bank options that are available to you. Many high street banks offer new businesses the opportunity to bank for free in the first year, which is of great advantage to startups who are trying to minimise costs. However, some banks may charge fees for certain services or require you to maintain a minimum balance in your account. It is important to always consider these factors and choose a bank that offers the services and terms that best suit your company's needs.

Once you have successfully selected a bank, you will need to apply to the bank alongside the necessary documents. Some banks may ask for additional information, such as a business plan or financial projections, especially in cases where you are applying for credit or overdraft facilities. It is also worth noting that some banks may impose limits on the number of transactions or deposits you can make each month. Always make sure to inquire about any form of restrictions that could affect your business in the future.

After submitting your application, the bank will review your documents and conduct the necessary checks to verify your company and personal information. This process typically takes around two weeks, but it can vary depending on the bank. Once your application is approved, you will receive your business bank account details from the bank and you can begin using the account for your company's finances.

You have to take your time in choosing the right bank for your business and open a bank account because by this you will be laying a foundation for a more organised and professional approach to your company's finances.

Other Formalities

When setting up a limited company, there are other formalities aside from registering your business with Companies House that you will need to take care of to make sure that your business is completely compliant with UK regulations for companies. One of the most important steps is registering your business for corporate tax.

1. To register for corporation tax, you must create a Government Gateway account for your business, which will be used to manage tax obligations of your company online.
2. Once you have set up an account, you will need your Unique Taxpayer Reference (UTR), which is an identification number HMRC sends to companies within two weeks after successful registration.
3. Once you receive your UTR, log in to your Government Gateway account and select the option to add a tax to your account.
4. Choose corporation tax as your option and then enter your company's registration number and the date your company began trading.
5. It is very important to note that you have a three-month window period from the date your company is incorporated to complete the corporation tax registration process, so it is important to do it within this time to avoid any penalties.

Pay As You Earn (PAYE)

Another important legal obligation to fulfil if you plan to pay yourself or other employees through your company is the PAYE.

1. The first step to registering for PAYE is to register yourself as an employer with HMRC, which applies even if you are the only employee of your business.
2. After completing this registration, log in to your Government Gateway account again, add PAYE for employer to your account and begin handling your payroll.
3. This will allow you to manage employee salaries, national insurance contributions, and income tax payments directly through the PAYE system.

If your company employs staff, you will be required to comply with the pension auto enrolment rules. This means that you must set up a workplace pension scheme and deduct pension contributions from your employee's wages alongside making the minimum employer contributions as set out by law. These rules apply even if you are the only employee of your company. However, there are exemptions to this rule. If your company only consists of one or more directors and no other employees, you can apply for an exemption from auto-enrolment. This allows you to opt out of automatic contributions and you are still given the flexibility to set up a personal scheme for yourself if you wish.

VAT

VAT registration is another important consideration for limited companies. As a company, you are not required to register for VAT except if your company's annual turnover exceeds the VAT threshold, which is currently £85,000 in the last 12 months. However, if you anticipate that your buy will surpass the VAT threshold shortly, you can register for VAT within 30 days of knowing you will exceed the limit. Keep a close eye on your income and financial records to make sure that you remain compliant and avoid any issues with VAT registration.

Finally, it is very important to keep track of all these registration requirements and deadlines as you set up your limited company. Having these requirements in place at the start ensures that your business operates smoothly and stays on the right side of the law. This will help you avoid fines and penalties and also set a strong foundation for your company's growth and success.

Incorporate Your Company with Incorpuk Today

If you are wondering how to register your business in the UK, worry no more. At Incorpuk, we help you file accurate information when you register your company through us. We will also help you with incorporation articles, a registered office address, and all you may need to register your company in the UK. Contact our team if you seek any information; we will gladly assist.

Conclusion

As an entrepreneur or an investor who wants to create a company, you can follow the above steps to get started with creating your company. Although it requires minimal workload, if you follow the right procedure and get all the right documents ready, you might be done with registering your comp in just two weeks.

Although some registration processes take longer than two weeks, the typical period for getting approval on your company application is two weeks. Always make sure you go through your information to confirm that you are applying with all the correct information to avoid delays or rejected applications.

Once you successfully register your company, always follow up with never obligations and applications of your company to avoid penalties and sanctions from Companies House or HMRC. Do you have any questions on how about how to register a company in the UK? If yes, kindly contact one of our experts here for help today.