The game is the same. Only the location has changed. Setting up and registering a company in London - just like in the US, Canada, or Australia - involves picking a business structure, deciding on a name, and registering that name with the government. There may be a few other steps that apply to specific structures and scenarios (such as tax registration and employee benefits), but that’s essentially all you need to do. Structure. Name. Register.
Pick a Business Structure
Sole trader. Partnership. Limited liability company. Choose...but choose wisely.
As always, the simplest and cheapest option is selecting sole trader. To do so in the United Kingdom, you need a National Insurance Number (apply here), you need to register for self-assessment with HM Revenue & Customs, and you need a name (either your given or chosen name).
A private limited company requires additional paperwork, but offers the greatest financial protection and tax incentives. You’ll need the following:
- Business name and address
- One or more directors
- One or more shareholders
- Memorandum of Association
- Articles of Association
Registration can be done directly online with Companies House - the government registrar for companies in the UK - at a cost of £15, by post for £40, or via a third-party agent (prices may vary).
Pick and Register a Business Name
Your name need not be clever, or cute, or anything other than your actual, given name. That said, if you want to pick something else, there are a few steps involved.
- Check Availability - names can only be applied to one entity, so you’ll need to confirm that the name you want is not already registered. You can check the Companies House index for limited company names, or use an agent search tool like the one from Companies Made Simple.
- Sole trader and partnership names can NOT include Limited, Ltd., plc, or LLP in the name, nor can they suggest connection with the government, or contain offensive words or terms.
- Limited Company names should be totally unique and must end in either Limited or Ltd. They can NOT suggest connection with the government, or contain offensive words or terms.
For complete protection, you may want to look at taking the extra step of registering your brand as a trade mark. This service is done online at a cost of £170.
Depending on the type and industry of your company, you may need additional licenses. The fastest way to check is via the online License Finder.
As a self-employed worker in the UK, you will likely need to make National Insurance contributions. As an employer, you’ll need to make deductions for your employees.
If your VAT (value added tax) taxable turnover is greater than £81,000, you’ll need to register for VAT with HMRC.
As an employer, you’ll also need to register for PAYE (Pay As You Earn) with HMRC. This allows you to collect income tax and insurance contributions from your employees.
Other Useful Links
Companies House (Wikipedia)
It’s cheap and easy to do everything online yourself, but you can always opt to pay an agency to do everything for you. Either way, you should have everything you need to open for business in very little time. London is a fascinating city to both live and work, so you’ll definitely be happy with your decision to open shop there.