How to Setup a Company in the UK – Ultimate Guide and FAQs

The United Kingdom has a long history of entrepreneurship that continues to thrive, attracting thousands of new business owners and investors to this day. While the UK has been flexible in welcoming new business owners who want to set up a company in the UK, one must still navigate through the legal process of getting their business registered in the UK. This will guide you on setting up a company in the UK and starting your business without any hiccups.

Visit Companies House

The process of company setup in the UK starts with using Companies House, which is the regulator for companies operating in the UK. The platform not only helps in incorporating one’s company but also registers it with the HMRC for corporate tax collection. 

The registration process is pretty straightforward, and you will get a certificate of incorporation in the end, which will confirm the company is legal and will show the date your company was formed and the company’s unique identification number. 

The process costs around £12 and will require some personal information such as a telephone number, the father’s first name or mother’s maiden name, a passport number, and place of birth. It should be noted here that if you choose not to use ‘Limited’ alongside your company name, then you will have to carry out the registration process by post. The platform also allows users to generate their Government Gateway user ID and password. 

Get Familiar with Standard Articles of Association

So, what are articles of association? In short, these govern the everyday rules that the company will follow, along with the relationship between the company’s shareholders and directors. New businesses will have the option of choosing between creating a customised one or using standard articles during the setup process. This can be changed later on if new shareholders are brought on board or after the first round of investment. 

The Address

It goes without saying that a company set up in the UK will mean that you will need a physical address for your company in the UK. This address is to be made public, so keep it simple and make sure that it’s close to the business hubs in the UK and not far off towards the countryside. You can also choose from a list of registered addresses for a cost, depending on the registration service you go with. 

Appointing the Director

If you are going to use any one of the high-street banking establishments for your business in the UK, you will have to name a director for the company you wish to establish. This can be one individual at first and can be changed later. 

Since high-street banks will carry out a thorough background check on all investors and directors of a company, they will require to visit the bank branch and provide their ID. This is why it is recommended to only have one person involved so that the process goes down smoothly. It should be noted that if you do not name a UK director, then opening a business account at a high-street bank is going to be difficult. 

Decide Who are the Shareholders

We’ve mentioned shareholders previously, but how does a new company name its shareholders during company set up in the UK? Every corporation must have at least one shareholder. This individual can also be named as the director. 

Companies House will require their full name, date of birth, and residence address. A corporation must have at least one shareholder, who may also serve as a director. The directors’ shares can be divided (but not necessarily equally). Shareholders often vote on decisions during meetings, with one vote equalling one share; therefore, majority shareholders tend to have more power. In the UK, a ‘person of significant control’ (PSC) is a shareholder who owns more than 25% of the stock.

VAT

For companies where the annual turnover exceeds £85,000, the company will need to be registered for VAT. That being said, new businesses are given the opportunity to get their business registered for VAT during the registration process. This may be beneficial if you plan on selling to other enterprises that are registered for VAT and want to reclaim the VAT.

Opening a Business Bank Account

This can be an extremely exciting time for any business owner, but one must not forget to open a business bank account in the UK in order to receive or transfer money. When it comes to opening a business account in the UK, you will have several options, such as high-street banks, bank-like accounts, and even digital banking. Here’s a quick breakdown of what to expect in terms of banking options in the UK. 

Bank-Like Services

When looking for a bank-like account for your business, Tide is the one name that comes to mind. Not only is it an authorised formation agent, but it also provides financial services as well. For companies that employ freelancers or remote workers from other countries, Revolut and Wise are two other options that allow businesses to carry out transactions in multiple currencies. 

Digital Banking

The good news is that the UK is home to some of the most progressive digital banking companies in the world. One name that comes to mind is Starling Bank, which has been set up for UK residents who wish to set up a company in the UK. But, there are many other options that easily integrate with a company’s accounting software, streamlining the entire process.

High-Street Banks

If you’re old-fashioned, you could always go with one of the many high-street banking establishments that the UK has to offer, such as Lloyds or HSBC, both of which provide multiple services to new business owners and start-ups. HSBC has also introduced the Kinetic app that allows its customers to scan or deposit cheques digitally. 

Stay Abreast with Business Regulations

Staying up-to-date with the latest business regulations is crucial for the success of your business in the UK. By subscribing to government updates, attending industry events, joining industry associations, consulting with legal professionals, using online resources, and conducting regular internal reviews, you can stay informed about the latest regulations and ensure that your business remains compliant. By staying ahead of the curve, you can also position your business for success in a constantly evolving regulatory environment.

Look into the Innovator Visa in the UK

This visa is intended for those who wish to establish a new business in the UK. If you wish to apply for this sort of visa, you must ensure that your company idea is original and has been recognised by an authorised agency. The business owner needs to show at least £50,000 in investment funds and have proof of where the money originated from to be eligible.

You should also have enough personal finances to cover your expenses. You must have at least £1,270 in your bank account for 28 days before applying for, renewing, or switching to this visa. For foreign nationals wishing to set up a company in the UK and use the Innovator Visa, one of the prerequisites will be to be able to communicate in the English language at the Common European Framework of Reference for Languages (CEFR) at level B2.

You can also apply for a start-up visa if you obtain an endorsement from a UK higher education institution or an organisation that has a history of aiding UK businesses. You must demonstrate that your company concept is novel, distinct, and has the potential for growth. The application fees begin at £363. You can stay in the UK for up to two years with a start-up visa. It is important to note that this particular type of visa cannot be renewed; however, you can change visas, as in change to another visa while in the UK.

FAQs

What will you need before setting up a company in the UK?

Startups and new business owners will require the director’s service address and an address in the UK of the company.

What is not required when setting up a company in the UK?

Contrary to popular belief, you do not need to have a work visa or a UK residency to set up a company in the UK. 

How will you be filing tax returns for your company in the UK?

You will need to start the process by getting your company registered at Her Majesty’s Revenue and Customs or HMRC as a sole trade, limited company, or partnership.

You can find all the information you need on new company formations in the UK by visiting Start Company Formations.