Are you thinking about starting a business in the UK? If so, this guide will give you all the information you need to get started.
Choose a Business Structure
Choose a Business Structure
First, you’ll need to choose the right business structure. There are four main types of business structures in the UK: sole trader, partnership, limited company, and charity. Each has its own advantages and disadvantages, so it’s important to choose the one that best suits your needs.
A sole trader is the simplest business structure. You are the sole owner and manager of the business, and you are responsible for all aspects of the business, including its debts and liabilities.
A partnership is similar to a sole trader, but there are two or more owners. Partnerships can be either general partnerships or limited partnerships. In a general partnership, all partners are equally liable for the debts and liabilities of the business. In a limited partnership, there is at least one partner who is not liable for the debts and liabilities of the business. This partner is known as a ‘sleeping partner’.
A limited company is a more complex business structure. It is a separate legal entity from its owners, and has limited liability. This means that the owners are not personally liable for the debts and liabilities of the business. A limited company must be registered with Companies House.
A charity is a type of organisation that is set up to provide help or relief to those in need. Charities are exempt from certain taxes, and they can also apply for grant funding. To be classed as a charity, an organisation must meet certain criteria set by the Charity Commission.
Once you’ve chosen your business structure, you’ll need to register your business with Companies House. This is a legal requirement in the UK, and it’s also necessary to open a bank account in your company’s name.
How to Register a Business with Companies House?
- Go to the Companies House website and create an account.
- Enter your company’s details, including its name, registered address, and contact details.
- Choose the company type (e.g. sole trader, partnership, limited company).
- Enter the names of the directors and shareholders.
- Pay the registration fee.
Once you’ve registered your company, you’ll need to get a business bank account. This is important because it will help you to keep your personal and business finances separate. It’s also a good idea to get a business credit card, which can be used for business expenses.
How to Open a Business Bank Account?
- Shop around for the best deal on business banking products and services. These days you have the option to pick between traditional and fintech driven banks.
- Compare the features and benefits of each account.
- Choose the account that best suits your needs.
- Follow the instructions on how to open an account.
- Deposit money into your new account.
After your business is registered and you have a bank account set up, you’ll need to get a business insurance policy in place. This will protect your business from any potential risks, such as liability claims or property damage.
How to Get a Business Insurance Policy in Place?
- Decide what cover you need. There are many different types of business insurance, so it’s important to choose the right policy for your business.
- Compare quotes from different insurers.
- Choose the policy that offers the best value for money.
- Purchase the policy and start using it immediately.
Finally, you’ll need to keep track of your finances and make sure your tax affairs are in order. This includes registering for VAT, which becomes compulsory when you hit the VAT threshold, and filing your annual return with HMRC. To make your life easier, develop a system of keeping all your records.
How to Create a System for Keeping Business Records?
- Choose a method of record keeping that suits your needs. This could be a paper-based system, an online accounting software package, or a combination of both.
- Set up a filing system for your records. This should include separate folders or files for different types of records (e.g. invoices, receipts, bank statements).
- Keep your records up to date. Make sure you enter all transactions into your system on a regular basis.
- Back up your records. This could be done electronically or by making physical copies and storing them in a safe place.
- Destroy old records. You should keep business records for at least six years, but after this they can be shredded or destroyed.
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