How to Start a Business in the UK

Establishing a corporation has been significantly simplified and streamlined, thanks to the innovative services provided by Formationshunt. Our platform offers a user-friendly, step-by-step online process that enables the swift entry of all necessary company details without requiring extensive paperwork. We electronically submit your application to Companies House, which approves most incorporation requests within 48 hours.

Formationshunt is equipped to handle the formation of all major types of companies in the United Kingdom, coupled with an extensive selection of optional add-ons. These add-ons allow the customization of your company's formation, ensuring it is tailored precisely to your requirements. Furthermore, we remain abreast of all changes to the ECT Act 2000 that may impact incorporations, ensuring our services are always up-to-date and relevant.

Selecting the appropriate structure for your business is essential. Although many businesses choose a limited company structure, there are other viable options to consider as well. It's important to fully grasp the implications of each business structure or consult with a professional before making a decision.

Pick a Company Name

Before you start setting up a company, you need to pick a name. If you're creating a company that is limited by shares, you need to decide if you want to add the word ‘Limited’ or ‘Ltd’ at the end. You can check if your chosen name is available by using our company name search tool.

Registered office address

The registered office address serves as the official address of the company. Official mail from government agencies such as Companies House and HMRC is sent to this address, which is listed on the public register.

A company’s registered office address must be located in the same region of the United Kingdom where it was originally registered. For example, a company registered in England and Wales cannot use a registered office address located in Scotland.

You must include the whole address, including the postcode.

Some businesses prefer to acquire a business address service for a variety of reasons, and this is just one of the numerous optional add-ons available through our company formation service.

In addition, beginning in March 2024, corporations must give a registered email address when incorporating. Established companies are required to include this information in their next confirmation statement. Companies House will use the registered email address for all official communications regarding the company. For example, issuing reminders, questions, or to update public record information.

Share Class:

At least one irredeemable (non-redeemable) share class, usually ordinary shares, is required for a limited-by-shares company. When incorporating, at least one irredeemable share must be issued. 
Ordinary shares are becoming more prevalent, even though many businesses only have one class of ordinary shares.
Businesses with several share classes—which might be fully paid, entirely unpaid, or partially paid—and share class currencies denominated in US dollars, euros, or sterling are also supported by FormationHunt.
You must include specifics on the following:
Class description: Ordinary shares are used to form the majority of limited companies.

Nominal value of each share class: The majority of businesses are established with a £1 nominal value for their share capital, although this can be as low as £0.000001 per share.
The rights linked to each share class are called prescribed particulars.

Director's details:

Your company must have at least one director who is an individual (not a corporate director) aged 16 or older. For each individual director, you must provide:

1. Full first name(s).
2. Surname.
3. Any other names used throughout the preceding 20 years or as per his passport.
4. Complete service address including town, county, and postcode (for public record).
5. Usual residential address (protected information that will not be publicly available).
6. Country of residence.
7. Date of birth.
8. Nationality.
9. Business occupation - you may put anything like “Director or Businessman” whichever applicable.
10. The number of shares, if any, to which the director is entitled, as well as any consideration paid.
11. Consent of the individual agrees to serve as a director of the corporation.

For each Corporate Directors, it is required to provide the following information:

1. The corporation's name and its registration number.
2. The address of the registered or principal office, including the postal code.
3. The jurisdiction where the corporation is registered.
4. A statement indicating if the director is a registered entity at Companies House in the United Kingdom.
5. For a corporation registered outside the United Kingdom, provide information on the entity’s legal structure and the applicable governing laws.
6. Name of the representative authorized to act on behalf of the director.
7. Number of shares, if any, assigned to the director, along with any related compensation details.
8. Confirmation of the corporate entity’s consent to act as a director of the company.
    

Company Secretary Information (where applicable)

In case you choose to appoint a secretary, it’s mandatory to provide the following information for each individual acting as a (non-corporate) company secretary:

1. Full forename(s).
2. Surname.
3. Any additional names previously utilized.
4. Complete service address, including the town, county, and postal code.
5. The quantity of shares, if any, allocated to the secretary, along with details regarding any compensation received.
6. Consent of the individual to serve as an officer of the company.

Incase any another company is appointed as your secretary, you need to provide the following information:

1. The corporation’s name and registration number.
2. The full address of the registered or principal office, including the postal code.
3. The jurisdiction in which the corporation is officially registered.
4. Indication of whether the corporate secretary is a registered entity at Companies House in the United Kingdom.

For a corporation not registered in the UK, details regarding the legal structure of the corporation and the governing laws.

1. The number of shares, if any, allocated to the corporate secretary, along with any consideration received.
2. Consent of the company authorizing the corporate body to serve as an officer of the your company.

Details of any persons with significant control (PSCs)

The reason to add a PSC – this outlines how the individual gains control over the company. It's usually due to holding more than 25% of the company's shares and/or voting rights, or possessing the authority to appoint or remove the majority of the board of directors.

• Consent that they are a PSC (as an individual).

Security information

To submit documents digitally, Companies House mandates an electronic signature for each member. This signature is made up of responses to any three of the following security inquiries:

1. Place of birth (first three letters needed).
2. Phone number (last three digits needed).
3. National insurance number (last three digits needed).
4. Mother's maiden name (first three letters needed).
5. Father's first name (first three letters needed).
6. Passport number (last three digits needed).

Please note, this information will not be visible on the public record.

At this stage, you might be feeling overwhelmed by the amount of information needed! Yet, it's important to remember that directors are often also officers and could potentially be a PSC in the newly established company. If you're utilizing Formationshunt to create your new company, you'll initially be prompted to choose all the roles each person will hold (such as director, secretary, shareholder, PSC), and then you'll be required to provide the necessary details for that specific combination of roles.

If you're ready to register your company, you can begin the process now by choosing your company name through our company name availability checker

Comprehensive Guide to Starting a Business Step-by-Step

Only a third of startups in the United Kingdom manage to survive beyond their fifth anniversary. Drawing from our experience, it is observed that successful entrepreneurs meticulously plan the inception of their businesses by taking into account market trends, geographical location, sources of funding, and other critical factors that could significantly influence the viability and success of the venture.

Successful businesses typically select a legal structure that aligns with the founders' desire to delineate between business and personal liability, while also considering the tax obligations associated with the chosen structure.

Founders employ a variety of tools and resources, including company name generation tools and platforms for company name searches, to facilitate a seamless transition through the initial stages of the startup journey.

Write a Business Plan

Did you know that 80% of millionaires work for themselves? So, if you're thinking about starting your own business, you're on the right track to becoming financially independent. To help you out, we've created this ultimate guide on how to get your business off the ground, filled with useful tips and essential resources.

Whether you've got a killer business idea, are looking into getting funding, or are all set to officially start your business, this guide has got you covered. It offers advice and resources to help you take those important first steps towards launching your company and growing it.

Let's jump right in and explore the thrilling world of starting a business in the UK!

According to the Office of National Statistics (ONS), 92.9% of UK businesses make it through their first year, but only about one-third remain active after five years. Research indicates that the primary reasons for businesses failing to achieve their five-year goal include:

1. Lack of understanding of current market trends and data, like the survival rates of
2. Businesses in their specific sector
3. High competition
4. Unforeseen changes in regulations
5. Challenges in securing new funding
6. Initiating businesses with inappropriate legal frameworks.

Nonetheless, there are numerous factors to take into account before diving in. Given that only slightly more than a third of UK startups survive beyond their fifth year, it's crucial to adequately prepare to guarantee the success of your venture.

In this manual, we'll guide you through the steps involved in launching a business from the ground up, offering essential advice to set up your business in the uk for success in the short and long term.

1. Develop a robust business concept

The foundation of a successful business lies in the formulation of a concept that addresses a societal need. While the aspiration to embark on a venture that aligns with one's passion is commendable, it is imperative to ensure that such a venture is not only financially viable but also sustainable in the long term.

Achieving equilibrium between personal passion and professional competence represents an ideal starting point. Upon the conception of your business concept, it is advisable to commence research on strategies for expansion and to lay the groundwork for your business plan.

2.Conduct a thorough analysis

Conducting extensive market research yields good business ideas. To determine whether your idea is viable, begin by conducting a SWOT analysis. 

SWOT: Strengths, Weaknesses, Opportunities, and Threats. It's an excellent tool for further analysing your business idea and developing the best strategy.
 

Strengths:

• Distinctive qualities that differentiate you from your competitors
• Skilled and knowledgeable employees
• Tangible assets including intellectual property, capital, and exclusive technology.

Weaknesses:

• Consider your company's weaknesses
• Your ivals' strengths
• Limited resources
• Unclear unique selling proposition.

Oppourtunities:

• Include untapped markets for particular goods
• Lack of local competition,
• Growing demand for your goods or services
• Press and media attention for your business.

Threats:

• New rivals
• Changing laws and regulations
• Unfavorable press and media attention
• Shifting consumer perceptions of your business
   

It is also important to research few other parameters to evaluate your business concept with your intended audience through surveys, interviews, and product trials to address the following questions:

1. Who is most likely to buy your product or service?
2. What price points are individuals willing to accept for your product or service?  
3. What are people’s opinions regarding your competitors?  
4. What challenges might your business encounter?  

You also need to examin pre-existing data to obtain insights into your prospective market such as:

1. Official government statistics  
2. Recent questionnaires and research findings  
3. Articles from newspapers  
4. Up-to-date corporate information  

3.Creating a business plan

A business plan acts as a guide – it details what your company aims to accomplish and outlines both your present and future objectives for achieving success.

Your business plan doesn’t have to be excessively lengthy, but it must be thorough. It should demonstrate your understanding of the market, your target audience, and your financial strategy or funding approach.

An impactful business plan should encompass the following:

1. Business summary: A brief overview of your enterprise and your goals for achievement.
2. Business description: A concise explanation of what you intend to provide, the reasons behind it, your target audience, and the rationale for the potential success of your idea.
3. Marketing and sales strategy: Information regarding your customers, competitors, pricing approach, distribution channels, and marketing strategies.
4. Marketing and sales approach: Insights into your target audience, rivals, pricing structure, distribution methods, and promotional strategies.  
5. Products and/or services: A comprehensive overview of the products/services you provide and how they will add value to your customers.  
6. Organizational structure: Information regarding your qualifications, the expertise of your team, and the individuals you intend to hire.  
7. Business operations: An outline of your business’s location and facilities, as well as your production and IT systems.  
8. Financial forecasts: A breakdown of cash flow predictions, financial statements, and balance sheets. Essential components of your financial strategy should encompass revenue streams, the capital required, your plans for loan repayment, and the collateral you can offer lenders.

4.Business Registration

When registering a company, how do you determine which type to select?

The response to this inquiry forms the basis for the type of company you envision for your business. In the United Kingdom, we provide several types of company registrations, allowing you to choose a structure that best aligns with your business's nature.

Company Limited by Shares (‘Ltd.’ or ‘Limited’):

This is the most common and basic type of company structure chosen by individuals in the UK. If your business functions as a typical ‘for-profit’ entity, adhering to the usual industry standards and practices, and you do not intend for the shares to be publicly traded on the stock market, then a company limited by shares would be the appropriate choice.

Click on the link to know more in detail about the company sturcture and which type to choose .

5.Organize your financial management and funding sources.

Opening a business bank account is an essential first step, as it differentiates your business finances from your personal ones.

It enhances your professionalism and helps maintain better organization of your finances. As a result, handling bookkeeping and preparing for taxes is much easier.

If you're contemplating how to launch a small business without any capital – there's no need to be concerned, as there are various methods to finance your business and address initial expenses. These include:

1. Business startup loans: You can secure a loan for starting a business or a small business loan from various lenders to use for working capital, inventory, and equipment, among other things.
2. Business grant opportunities: There are various government and EU-funded programs offering grants for businesses, including British Small Business Grants, InnovateUK, and Horizon Europe. Grants are awarded on a case-by-case basis, and repayment is not required if you win.
3. Angel investments: Angel investors provide capital to new business owners in exchange for a share of the company. They offer entrepreneurial guidance to help you succeed in the market, but this also means they will have a say in how the business is run.
4. Crowdfunding: This approach to raising business funds has grown in popularity, involving many people contributing small amounts to support a business project. You can also ask friends and family for investment in return for a share of the company or a reward.

6.Protect your business with insurance

To ensure a secure and protected work environment, it's crucial to have business insurance.

The specific type of insurance you need will depend on how your business operates, but you're likely to need one or more of the following:

1. Business contents insurance: This covers all your stock and materials in case of damage, theft, fire, or natural disasters. Even if you operate from home and have home contents insurance, this is still necessary.
2. Commercial property insurance: This protects your business premises from damage, theft, fire, or natural disasters.
3. Professional indemnity insurance: This safeguards you against lawsuits from dissatisfied customers.
4. Small business public liability insurance: This protects you from claims from the public who have been injured or suffered property damage due to negligence.
5. Employers’ liability insurance: Similar to public liability insurance, but for your employees.

7.Choosing the right tools for Your Business

Operating a business becomes significantly more efficient when the right tools are invested in. These tools not only facilitate better decision-making but also save both time and money.

While this list is not exhaustive, here are a few essential tools to consider when establishing your business.

1. Accounting Software: This tool is invaluable for managing business expenses and streamlining the process of preparing tax returns. For small businesses, Xero and quickbooks offers a cost-effective alternative to hiring an accountant.
2. Domain Registration: In addition to registering your company, it is crucial to secure a domain name to maintain a professional email address. The domain name should be created by you, followed by .com, .co.uk, etc.We have partnered with names.co.uk to provide you with free .com and .co.uk domains for the first year
3. Virtual Office Address Service: Opting for a virtual office address can help protect your personal address while providing a secure and permanent location for business communications. You can choose our Registered office address for your company,Director service address for officers and Business mail forwarding address to receive business packages .This services saves time on administrative tasks and ensures you can receive mail from anywhere.
4. Point of Sale (POS) Device or payment gateway: Investing in a card reader enables you to conduct business from any location. Whether it's accepting in-person payments or on the move, this device ensures quick and efficient transactions.
5. Customer Relationship Management (CRM) Software: CRM software is essential for maintaining strong customer relationships while also saving time. It automates tasks, tracks sales and marketing data, making it a crucial tool for small businesses.

Develop a Marketing Strategy

After conducting thorough research and formulating your business plan with strategic strategies in place, the next step is to begin marketing your business.

There are numerous avenues for marketing your business, including personal recommendations, attending networking events, advertising your product or service in local media, and online platforms.

Digital marketing is likely to yield the most consistent results, accounting for 75% of the UK's total marketing budget and surpassing traditional marketing methods, which have seen a 9.6% increase between 2020 and 2021.

Below are key considerations to keep in mind when marketing your business.
 

Establish a Website

Your website serves as the primary online presence for your business, acting as an online storefront where customers can learn more about your products or services.

In just 50 milliseconds, visitors form an opinion about your website, emphasizing the importance of ensuring its functionality is seamless. Your website should be straightforward, easy to navigate, and well-organized, with your most critical messages displayed prominently. To enhance credibility, it must be accessible across all devices and operating systems, and contain accurate information.

At FormationsHunt web development and marketing services we offer you budget-friendly websites on platforms like WordPress,Laravel with templates that allow you to design a user-friendly websites for your company, even without prior design experience.We have you enhance your website for Search Engine Optimization (SEO).

Once your website is operational, it is imperative to optimize it for search engines, such as Google.This process entails identifying keywords that potential users might utilize when searching for your product, ensuring that the search engine directs traffic to your website. It is important to note that this strategy is a long-term endeavor, and immediate increases in website traffic may not be observed.

We also help you Iimplement a Social Media Strategy by utilizing social media platforms which is an effective method to capture the attention of prospective customers. In the UK alone, approximately 16.4 million consumers engage in purchasing activities through social media channels.We post regular contents that resonates with your target audience to drive traffic back to your website. This is an opportunity for visitors to learn more about your business and the products or services you offer.

While it is not essential to be present on every social media platform, conducting research to determine the most suitable platforms for your business is advisable.

Facebook and Instagram are recommended as initial platforms, as they facilitate direct sales from your social media accounts and offer complimentary ad training to enhance your marketing strategies.

Prepare for Business Expansion and build your team

Expanding your business involves striking a balance between financial management and profitability. Whether it involves scaling your marketing efforts, introducing new products, or collaborating with influencers, the primary objective is to increase revenue and establish a robust customer base.

Many businesses adopt automation technology to streamline tasks, including lead generation, accounting, and email marketing.

As your business grows, the need to assemble a team to manage daily operations becomes crucial. This team may consist of full-time employees, contractors, or freelancers, depending on the specific needs of your business.

There are various methods for recruiting additional staff. Common approaches include:

• Job boards: Post available positions for free
• Recruitment platforms: Assist with video interviews and CV screening
• Freelancer websites: Source talent for both short-term and long-term projects
• Social media: LinkedIn or Facebook

In conclusion, establishing a business requires significant time, dedication, and perseverance. Adopting a systematic approach, with well-defined timelines and achievable goals, can significantly influence the success of your venture. However, with a commitment to your objectives, success is attainable.

We understand starting a business in the UK involves several crucial steps, from creating a solid business plan to securing the right funding sources, especially when you are completely new to the market. Whether you’re looking forward to register a UK business, register a small UK business, or establish a company in UK, understanding the requirements and options available can make the process much smoother. At FormationsHunt, we offer guidance for each step, to help setting up a limited company or advice on the specific registrations needed for different business types. If you're ready to set up a company in UK, our services are designed to support you in launching with confidence and compliance.

Should you require assistance in drafting your initial business plan, our comprehensive guide on creating a business roadmap and business plan is available. Additionally, resources from GOV.UK's business plan hub, including templates and examples, are accessible to assist you in getting started.

Ready to set up a business in UK? Begin your UK Company Registration journey today with free business banking starting from £52.99.