For people unfamiliar with Companies House, registration fees, business plans and the like, figuring out how to set up a business can be a daunting task.
It’s easy to feel overwhelmed when faced with the idea of setting up a business by yourself, but in fact, there are just a few checkpoints to hit before you’re in the clear. So, let’s dive right in: here are six important things you’ll need to grasp about how to set up your own business.
1. Your company name
No surprises here: every new company will need a name. It has to be something memorable, catchy and which nicely sums up everything you do. However, it will also have to be unique as no two companies on the Companies House Register can be the same.
The first thing to do, then, is to check if your name is available with Companies House. If it is taken by a public limited company or a limited liability partnership then you will have to choose a new one, but there may be times when you have some resource.
For example, imagine you’re a sole trader and you want to trade under your existing name. However, someone has already trademarked that name. This gives them right to the name even if they have not yet set up a company. You may be able to fight them at a tribunal if you can show they have trademarked it for financial gain with no intent to set up a company.
If your company name is already taken by a sole trader it may be possible to still use it depending on factors such as the location of your company, the proximity between you and the sole trader, and whether any confusion could arise in the minds of consumers.
Find out what is a private limited company.
2. The registration fee
When you set up a business with Companies House you will have to pay a registration fee. This is normally £12 if you go to Companies House direct, but formation agents like The Formations Company charge less and provide much more in terms of help and support with how to set up your business if you need it.
3. Documents and information
There’s little to be worried about in the application to set up a business: it only takes a few minutes to fill in. You’ll just need a few basic details such as your name, date of birth, contact details and answers to some memorable questions to help with security.
On top of that, you should have proof of identity to hand, such as a passport or a UK Driving License, and any necessary documents regarding sensitive words for your company name to show you’ve been given permission to use them. These should be included as a Pdf document.
4. Directors and Shareholders
When setting up a business you’ll need at least one director and at least one shareholder. If you’re making the move from sole trader to a limited company you may choose to take on both roles yourself: it’s up to you.
When establishing a shareholder, you’ll need to have at least one share. However, if there are more than one of you setting up this business you can hand out shares to each person. When partners set up a business, for example, they often create two shares – one for each of them.
You can also have a company secretary if you want one although, contrary to popular belief, this is not mandatory for a limited company.
For your company director, you will need to include: full name and date of birth, country of residence, occupation and residential address. Shareholders will have to provide name and address together with information about their shares such as their value, the number of shares they hold and the currency they are in.
5. Set up a business plan
As a brand new company, it’s a good idea to start setting up a business plan as soon as possible. This will help you communicate exactly what your company’s ideas and goals are in case of networking events, funding pitches or conversations with potential clients or partners. For more information on how it’s done, check out this guide to writing a business plan.
6. Your registered office
The last thing you’ll need is an official UK address for your company. This is the place where all the official mail will be sent. In the early days, this might be your own home, but you will have to register it as your official company address, which means putting it on the public company register: not a good idea if you want to avoid unwanted contact from customers and suppliers.
Alternatively, you might want to use a Registered Agent Service. This helps to ensure your company stays the right side of the law by offering total regulatory compliance, protection from unsolicited mail and full security. It also gives you a prestigious registered office based in the heart of the tech startup scene in London. It’s a great way to ensure you are compliant as well as looking bigger and more successful than you are to begin with.
It is a relatively simple process, but getting a little help from the experts can take you a long way. Now you’ve read the basics on how to set up a business, check to see if your company name is available or browse the help centre for more guidance.