In the United Kingdom there are really only two ways to ‘register a business name’ (AKA setup a business), to register as a sole trader, or to register a limited company. In this post we are going to concentrate on the latter of these two options, demonstrating how you can register a company online in just a matter of hours. But first a little background…
A limited company is perhaps the most popular business structure in the UK – it’s nearest competitor being the aforementioned sole trader. The main benefit a limited company offers over a sole tradership is ‘limited liability’. This means that if the company were to encounter problems, the shareholders (more on these in a bit) are only liable to pay out the value of their shares… their liability is limited. Comparably, in a sole tradership, there is no distinction between the finances of the business or the finances of the individual involved.
Now let’s look at how to register a business name.
Companies House are the UK’s registrar of companies. A limited company can not be formed without the say so of Companies House. Once formed, a limited company is given a company number and placed on the Companies House register (hence the term ‘register a limited company’). Duplicate names are not allowed on the register, so the act of starting a limited company is the same as registering a business name.
If you do decide to register a limited company, you can either form directly with Companies House (the current fee for online incorporations is £12), or through a third-party company formation agent, whose software enables a company to be formed at Companies House (registration fees hover around the same mark as Companies House).
This raises the obvious question, why use a formation agent when you could form directly with Companies House
Well, Companies House very much offer a basic company formation – you get your company formed and that’s pretty much it, you’re left to it. On the other hand, a company formation agent can offer a number of associated extras that will come in handy further down the line, such as permission to use the agent’s address as your company’s official address (registered office), confirmation statement filing (an annual filing obligation for all limited companies) and often much more.
Once you’ve decided how you’re going to register a company online, you’ll need to provide some information about the company and the individual/s involved (regardless of who your form with, Companies House or a company formation agent). This information includes:
- Unique company name
- Registered office address – the official address for the company
- Director information – the director is the person responsible for the day to day running of the company
- Shareholder – the shareholder is the owner of the company
- Number and value of shares the shareholder will hold
- Person with significant control – the person who ultimately controls the company
Once payment has been made and all this information has been provided the application is processed at Companies House where it’s normally accepted within a matter of hours.
There you have it… how to register a business name