To set up a business in the UK, the registration process you need to follow will depend on the type of structure you choose. Sole traders must register with HMRC for Self Assessment tax. To register a limited company, you will need to submit an incorporation application and any supporting documents to Companies House or use the services of a company formation specialist. According to Companies House, there were 890,684 new companies formed in the 12 months to March 2024.
- The three main business structures in the UK are sole trader, partnership, and limited company.
- Registering as a limited company offers personal liability protection and increases credibility with stakeholders.
- Using a formation agent can simplify the registration process and mitigate the risk of errors.
In this guide, we explain how to register your business in the UK, with a particular focus on setting up a limited company. Specifically, we will look at the main business structures used in the UK, why register as a limited company, and the benefits of using a company formation agent.
What are the main UK business structures?
As mentioned above, the type of business structure you choose will determine the steps that you need to take to register your new venture in the UK. The 3 main business structures are as follows:
| Business structure | Description |
|---|---|
|
Sole trader |
A sole trader owns and operates their business independently, and takes on full legal responsibility for all aspects of the business, including any legal liability, financial debts and losses. |
|
Partnership |
A partnership has one or more people who share responsibility for the business and any profits made |
|
Limited Company |
A limited company is a separate legal entity (i.e. separate from the owner/directors) and provides limited liability protection. This means that the owners/directors of the company are not liable for the liabilities of the business. |
“One major challenge was getting through UK company registration while juggling everything else. The paperwork appears simple, but missing a detail leads to delays. Getting the correct SIC code, setting up PAYE, registering for VAT – it stacks up quickly. I tackled it by mapping everything out in a step-by-step workflow. A clear plan genuinely makes a difference when time is tight.”
—Tom Hamilton Stubber, Managing Director, TutorCruncher
Why register a limited company in the UK?
Many people setting up in business opt for a limited company structure because it provides clear legal separation between personal and business finances, more credibility, and tax efficiency. As we will explore later in this article, the downside is that limited companies involve more administration and come with important duties and responsibilities that must be met by directors and those in positions of responsibility. Registering a legal company in the UK means that:
- Your business structure and name are legally protected
- You will build more trust with customers, suppliers, and investors
- Limited liability protects your personal finances
- You may find it easier to get funding or win contracts
- You may be eligible for government incentives and tax relief
- You can open a UK business bank account, and
- You may be eligible to apply for public sector contracts
“The first hurdle is navigating the paperwork. Honestly, it is a maze. Registering with Companies House, setting up taxes, and understanding compliance can feel overwhelming. That being said, do not let it scare you. Break it down step by step, and you will get through. Persistence is key. If you are unsure, get help—a formation agency or legal expert can save you from costly mistakes.”
—James McNally, Managing Director, SDVH [Self Drive Vehicle Hire]
Should I register as a sole trader or a limited company in the UK?
Whether you opt to use a sole trader or limited company structure in the UK will depend on the type of enterprise and whether you plan to grow in the future. For example, sole trader structures are ideal for freelancers and small, low-risk businesses. On the other hand, if you want to grow, take on investment, or protect your assets, a limited company may be more preferable for your needs.
How do I register as a sole trader business in the UK?
To register as a sole trader business in the UK, you need to:
- Choose a suitable business name – if you wish, you can trade under your own name or a separate one, but avoid anything misleading or offensive.
- Register for Self Assessment as a sole trader with HM Revenue and Customs (HMRC).
- Wait for your Unique Taxpayer Reference (UTR) from HMRC
Once registered with HMRC as a sole trader, you will need to ensure that you submit a Self-Assessment tax return each year. Your accountant can handle this process for you.
As a sole trader, there is no need to register with Companies House.
How do I register a limited company in the UK?
To register a limited company in the UK, you can either use a company formation agent who will handle the process for you or register manually on the Companies House website. Thankfully, setting up a company in the UK is a relatively quick process, as follows:
- Choose your company name – Companies House have strict rules on company names in the UK. It cannot be the same as or too similar to another already registered company. Make sure your company name is unique and compliant by using our company name checker. Always avoid sensitive words unless you have permission
- Appoint at least one director and one shareholder – if necessary, these can be the same person.
- Provide a UK-registered office address – this will be on the public record. You can use a registered address service such as that provided by Uniwide Formations if you would prefer not to use your own address.
- Create your Memorandum and Articles of Association – these are the rules for how your company operates. We can provide these for you if required.
- Set up your share structure – decide how many shares to issue and who gets them, and
- Pay the registration fee
Having submitted your company incorporation application, assuming that the requirements have been met, you will receive your Certificate of Incorporation. This proves your company is legally formed and includes your Company Registration Number. On the other hand, if your application is rejected, Companies House will usually tell you why, so you can correct it. When using our company formation packages, we can check your application prior to submission to make sure that it is correct and meets the Companies House requirements. This removes the potential for delays and refusals.
What should I do after registering my company?
Once your company is formed, you will need to adhere to your duties and obligations as a company director; this includes:
- Registering for Corporation Tax with HMRC within three months
- Setting up and maintaining statutory company records
- Opening a business bank account
- Registering for VAT if your turnover hits £90,000
- Checking if you need any sector-specific licences or permits
- Appointing an accountant or tax adviser
- Registering for PAYE and setting up payroll if you intend to employ staff – your accountant can handle this for you, and
- Using accounting software that complies with Making Tax Digital rules
“I registered for VAT immediately, assuming it was necessary. Later, I realised I could have waited if my revenue was under the threshold. Being VAT-registered added extra paperwork and made my pricing more expensive for non-VAT-registered clients. Consulting a tax advisor helped me understand when VAT registration was beneficial, and switching to the flat-rate scheme reduced administrative tasks. If I were to do it again, I would confirm I actually needed VAT registration before applying.”
—Burak Özdemir, Founder, Online Alarm Kur
Why use a company formation agent?
A company formation agent such as Uniwide Formations can take care of the registration process for you. In addition, we can
- Flag potential issues with your application
- Provide business support services like registered office addresses, identity verification, and secretarial help – including confirmation statement filing and share service
- Provide an online portal to manage your existing companies and create new ones
- Provide an introduction to an accountant and/or a UK bank
Company formation agents are especially useful for non-UK residents, regulated sectors, or complex group structures.
“One of the greatest hurdles I encountered was understanding the specific regulations tied to real estate. I underestimated how much detail goes into compliance—zoning permits, licences, and the legal structure of the business. Frankly, it felt overwhelming at times. Working with a formation agency was a game-changer. They gave me clarity on each step, ensured all licences were in place, and saved me from costly mistakes.”
—Toni Norman, Senior Marketing Manager, Tingdene Residential Parks
Common mistakes to avoid when registering a UK company
Any mistakes made during the company registration process can cause delays or even the refusal of your application. Some of the most common errors include:
- Choosing the wrong type of business structure
- Choosing a company name that is already taken, too similar to another or restricted
- Providing a personal address as a registered company address
- Submitting incomplete or incorrect information
- Missing deadlines for annual filings
- Not setting up statutory registers and ensuring that these are available for inspection
- Using the wrong SIC code for your business activity
Taking the time to get your business structure right from the outset can remove considerable financial and legal risk.
“Finding reliable suppliers was another challenge. We needed products of consistent quality and timely delivery, which took months of negotiation. Cutting corners was not an option—customers expect speed and reliability. Ultimately, a strong network solved many issues, including banking and licensing. If you want long-term success, invest in quality connections early.”
—Sarah Gibson, Director, Proactive Healthcare
FAQs
Do I need a UK business presence?
Yes. Your company must have a registered office in the UK. The key point to bear in mind is that it must be a physical address (e.g. your home address, office address or a service address from a formation agent) where you can receive formal correspondence.
Can non-UK residents register a UK company?
Yes. You don’t need to live in the UK to be a director or shareholder, but your company must have a UK-registered office.
How long does it take to register a company?
Uniwide Formations can normally register your company on the same day if the application is received by 1.30 pm UK time, assuming that you pass our ID verification checks.
What are the ongoing requirements?
Limited companies must file annual accounts, submit a confirmation statement, and maintain statutory records.
Can I use a third-party registered office address as my registered office?
Yes, as long as it’s located in the UK and can receive official correspondence.
Do I need a business bank account to start trading?
As a limited company, having a business bank account will help you to keep your personal and business finances separate.
What’s the difference between a trading name and a company name?
Your company name is the official name registered with Companies House. A trading name is an alternative name you can use, provided it follows the rules and doesn’t mislead customers.
Final Words
We hope that this guide has helped you understand how to register a business in the UK. As we have discussed, the process you need to follow will depend on the type of business structure you choose. As specialists in company formation, we can help you get your business off the ground quickly and compliantly, leaving you to focus on the exciting aspects: building your business.