If you plan on joining the community of British entrepreneurs and start your own start-up business, you will have to join the UK company incorporation and develop your business ideas to get your audience interested. This guide offers tips for people who want to work for themselves in the UK. This guide is meant for people who want to become self-employed in the United Kingdom.
Independent workers in the UK are fairly common, as there approximately 15 per cent of them. If you have come from abroad to the UK, self-employment, or becoming a freelancer is something you might want to take into account. This article covers the key points of starting a business in the UK and will guide you through various types of legal structure of UK companies.
Steps on How to Start a Business in the United Kingdom
- Make sure that you can start your own business legally in the UK. You have to make sure your immigration status allows you to work as a freelancer in the UK. This can mean ensuring that you have the visa and residence permit required for non-EU / EFTA citizens.
- Come up with a business plan. If you are serious about starting your own business in the UK, you’ll need a good business plan. Your plan will help you figure out if your business ideas for the UK have a chance to be successful. You will need to analyse the market and make budget forecasts as well. The business plan and cash flow prediction models can be downloaded from the UK government website.
- Choose your legal business structure. You could be a sole trader, an investor, a freelancer, or just a limited company For info, see the below section on UK business forms.
- Pick a company name and address. If you are a sole trader, you can use your name. You will need an email for the registration of your UK business for tax purposes and for joining the company register. Limited companies are the only ones that have to register their name, while others can register as a trademark to prevent anyone from trading under their name.
- In case you are a UK contractor setting up as a limited company. You should appoint managers and corporate secretaries, create your shares and investors, write your memorandum and association papers, open a separate bank account and register for corporation tax.
- Register with HM Revenue and Customs. For fiscal reasons, you have to register a UK company with HMRC. Limited companies have to register with companies house online (it isn’t free of charge).
- See if your startup UK business requires any additional rules. There may be additional requirements depending on the nature of your business. These include:
- licenses or permits (for example, food or liquor sales, street music or trading);
- insurance;
- regulations you have to follow in case you buy or sell products abroad, or store / use personal data.
You should focus on getting your business up and running after you have completed these steps.
Types of UK business structure
There are several different types of business structure in the UK. You can choose the one that is most appropriate for you:
Sole trader
This is the alternative if you want to work as an independent worker in the UK or have your own company.
General partnership
This type of business requires at least two people (or companies). Corporate liability is shared equally between partners, the profits are shared equally, and every partner pays tax on their share and is jointly responsible for all kinds of losses.
Limited partnership
Limited partnerships are similar to general partnerships, but they have at least one general partner, who runs the business and is personally responsible for all company debts.
Limited liability partnership
This is a partnership contract where each party does not assume personal responsibility for debts which the UK company can not pay.
Private Limited Company
This is a British type of business which is a separate legal entity from its managers.
Public Limited Company
The main difference between Public Limited Companies and Private Limited Companies is that their shares can be traded publicly.
Unlimited company
This type of UK company is not popular because investors are collectively and limitlessly responsible for business debt, which means that if business assets do not fulfil the obligations, they may be secured by personal assets.
Social enterprise
This is a UK type of business with the help of which you can invest all profits made to achieve charitable, social and environmental goals, instead of dividing them to investors.
Unincorporated association
An unincorporated association is non-registered, non-incorporated, and may include volunteer groups, small community associations and sports clubs.
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