Registration of a business describes the process of legally forming a business. Crucially, a business cannot function as a company until it has been officially registered with Companies House in accordance with the Companies Act 2006. When you register a company name and make it a limited company, you get several distinct advantages, most notably the ability to raise capital by issuing and selling shares to investors.
Register your company in easy steps
There is no hassle to register a company as it is quick and easy. As an entrepreneur, you just have to understand a few things to get started. Below, we’ve made it super simple by breaking down the process into nine easy steps, so you can get your business name locked in and start living that entrepreneur life.
- Check whether your company name is available.
- Decide on an official company address.
- Select a SIC code for your company.
- Choose the type of company you want to establish.
- Appoint a company director.
- Outline your plan for the company's shareholding structure.
- Decide who will own shares in your company.
- Sign a statement of compliance.
- Pay the setup cost for your company.
Check whether your company name is available.
When you think about the process to register a company name, you must check if your desired company name is available. Use a Company Name Availability Checker to ensure the name isn’t already taken or too similar to another. If it’s available, you can register it online.
Keep in mind that your registered company name doesn’t need to match your trading name. For instance, you could register as “Bright Future Enterprises” but trade as “Bright Solutions.” As a result, you have flexibility to create a brand that connects better with your audience while meeting legal requirements.
When choosing a name, avoid terms like “Ltd,” “LLP,” or “PLC” unless they apply. Also, be cautious with punctuation, symbols like “@” or “#,” or overly common words like “Services” or “Solutions,” as they may cause confusion.
Finally, when you register your company, steer clear of names that are too similar to existing businesses, especially in the same industry, to avoid disputes or legal issues.
Decide on an official company address
Next, when you search for “register my business” online, having a registered office address is essential. The business can receive letters, notices, and reminders at its official registered office.
All companies must have an ‘appropriate address’ as their registered office. This doesn’t need to be where daily business happens; it could be your accountant’s or director’s address. You should register your company with an address that guarantees prompt acknowledgement and handling of documents. Failure to comply could lead to penalties or even removal from the register. Remember, this address will be public at Companies House, so choose carefully to avoid any issues.
Choose a SIC code for your company
Now, it’s time for selecting the "business activity," which means defining what your company does by picking a Standard Industrial Classification (SIC) code.
Initially, you’ll see a dropdown menu with broad categories (for example, 47xxx – Retail trade). Once you pick one, a second dropdown will show more detailed options to refine your choice. You can assign up to four SIC codes for your business, and don’t worry because you can update them later if your business activities change.
Choose the type of company you want to start
Thinking about registering is a great first step, but before that, you must know what type of company it will be—whether it's a private company limited by guarantee, a private unlimited company, or a public limited company.
Did you know a private company limited by shares is the most common when you register a limited company? This type of company has a share capital, and each member’s liability is limited to any unpaid amount on their shares. For example, if a company has one shareholder owning 10,000 shares valued at £2 each, they would be responsible for £20,000 if those shares remain unpaid when the company is liquidated.
Appoint someone to the position of company director
Every private company needs at least one director, and this has to be a real person, not another company. The director must be at least 16 years old, can’t be someone who’s been disqualified from being a director in the past, and definitely can’t be in the middle of a bankruptcy process. Basically, they need to meet these basic criteria to take on the role legally and responsibly.
Outline your plan for the company's shareholding structure
In the UK, when you register a limited company, you need to give information about the shares in the company. This is called a "statement of capital." Shares come in different forms, each with its own set of rights and perks.
- Ordinary Shares: Give voting rights and dividends.
- Preference Shares: Receive dividends before ordinary shareholders.
- Cumulative Preference Shares: Accumulate missed dividends and must be paid before ordinary shares.
- Redeemable Shares: Can be bought back by the company.
- Non-Redeemable Shares: Cannot be bought back.
- Convertible Shares: Can be converted into another share under certain conditions.
- Non-Voting Shares: Do not give voting rights.
- Deferred Shares: Paid after shareholders receive theirs.
- Alphabet Shares: Assign different rights to different shareholder groups.
You can have as many shares as you want, and each one can have any value you want. Also, spell out the exact rights that come with each share, such as the ability to vote and receive rewards. Once you know how much the company was worth at the start, check to see if any money is still owed. If not, type 0 for it.
Decide who will own shares in your company
When you register your company as a limited company, you must have at least one shareholder (subscriber). You'll need to provide the following information for each subscriber:
- Address: Their full residential address.
- Security Details: Three unique security details for online signature verification (e.g., mother's maiden name, first three letters of eye color).
- Person with Significant Control (PSC): If a shareholder owns more than 25% of the company's shares, they are considered a PSC.
- Nature of Control: Identify how each subscriber exerts control over the company (e.g., through share ownership, voting rights, or the ability to appoint/remove directors).
- Subscriber Consent: Obtain confirmation from each subscriber that they consent to their information being used for company registration.
Sign a statement of compliance
Because establishing a company is a legal process, you will need to verify that you have followed the registration criteria set forth in the Companies Act and that you have read and agreed to the Memorandum of Association, which contains the regulations for operating a business.
Pay the cost to set up your company
Unfortunately, setting up a company isn’t free. You’ll need to pay a fee to register your business name. The cost is £50 if you register online and £71 if you use paper forms. For limited liability partnerships (LLPs), it’s the same—£50 online and £71 by paper. You can check the Companies House fees page for more details. Once your company is registered, remember to open a business bank account and register for corporation tax within three months of starting trading. These steps are essential for running your business smoothly.
Conclusion
So here we have a comprehensive guide on how to register a business. We hope this information will be helpful. Once everything is in place, it's time to focus on long-term goals like growing your business and building your brand.
Do you need help with business formation documents? The robot lawyer could be the ideal solution. From the ArBusiness Continuity Plan (BCP), Business Plan to Co-Founder Agreement, and more, we will make it easier for you to focus on your business. You can check our “Try for free” option to see how we can be the best legal partner for your business.
Frequently asked questions
Q.1. Do I need to register my business before I start?
A.1. Yes, every entrepreneur should register their business as it gives them a legal identity. Also, not registering your business at startup creates both legal problems and government penalties.
Q.2. Do small businesses need to be registered?
A.2. To operate legally and for tax reporting, businesses must get registered regardless of their size.
Q.3. How do I register a business name in the UK?
A.3. In the UK, the laws require you to register your business name either through Companies House or HMRC.
Q.4. How can I create my own company name?
A.4. To build your company brand, select names such as Creative Solutions, Tech Hub, or Green Horizons. The authorities may deny names that mislead customers. You may use the Company Name Availability Checker tool to check the name's availability.