Sole Trader, Limited Company, or Partnership - Depending on the structure of your business, the registration process will be different. We've bundled everything you need to know into the second installment of our 'Starting a Business' blog series.
- Sole Traders
All sole traders must register with HMRC. You’ll be expected to keep accurate records of business income and spending. You’ll be required to complete a Self-Assessment tax return annually. If your annual turnover is over £83,000 you must register for VAT. We’re not touching on VAT here, that’s a subject for another post. Visit https://www.gov.uk/set-up-sole-trader for more information.
- Limited companies
All limited companies must register (also known as incorporating) with Companies House. Going limited has more administration responsibilities than being a sole trader. You’ll need to provide Companies House with the following:
Company details
These details include the name and address of your company and the name of at least one director and one shareholder (probably you)
Articles of Association
Don’t panic. Articles of Association is just a document that describes the purpose of the company and how it will be run
Memorandum of Association
This memorandum is a document containing the business details and directors’ signatures
More information on setting up limited company can be found here: https://www.gov.uk/limited-company-formation.
- Partnerships
An ordinary partnership must register with HMRC. A Partnership Self-Assessment tax return needs to be completed annually. Each partner must complete a Personal Self-Assessment tax return. Just like a sole trader, once turnover goes over £83,000 the partnership must register for VAT. Go to https://www.gov.uk/set-up-business-partnership for more information
- Limited Liability Partnerships (LLP)
This is done through Companies House. You’ll need to provide the business name, the registered address of the business, the names of at least two directors, and an LLP Agreement that describes how the partnership will be run. All partnerships must register for Self-Assessment with HMRC and as we now know, once turnover goes over £83,000 the partnership must register for VAT. Go to https://www.gov.uk/guidance/set-up-and-run-a-limited-liability-partnership-llp to find out more.
What Next?
Keep an eye out for ‘Starting a Business – Part 3’, which will cover WHEN you need to register your business in more detail.
Have a question that you need answering right away? Our dedicated business advisors will be happy to answer any and all questions you may have. Contact us today, and we’ll get back to you as soon as we can.