If you’ve only recently started working for yourself, you may not have considered registering yourself; however, this must be done within the first three months to avoid penalties. The process is actually very simple, but can differ depending on the type of business you want to set up.
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Sole Trader
If you are operating the whole company yourself, you are a sole trader. This means that any company failures or outstanding debts are your sole responsibility. All you need to do is visit the HM Revenue and Customs website and register as self-employed, and after this you will be required to fill in a Self-Assessment tax return each year. This can all be done online and is incredibly quick and easy – all you need is your National Insurance number.
Partnership
If you and another person have equal running in the business, or one person has a significant investment in your company, you have a partnership. To register, you must first obtain a Memorandum and Articles of Association, which can be found at any law stationer or a specialised company formation agent. You must then send off for the relevant forms from Companies House, the UK’s registrar of companies. You can also register by speaking to a solicitor, who will be able to help you draw up a contract and register your partnership for you. Ensure that it is clear from the start what each partner’s role is, how much each partner is liable for, and what steps will be taken in the event of business disagreements or partners leaving the company.
Limited Companies
If the liability of your company’s members or subscribers is limited to the amount they have invested, you have a limited company. This means that while you are responsible for the company, you won’t incur the total losses if it runs into trouble. Forming a limited company can also have tax benefits, depending on its structure. The easiest way to register is to go through a dedicated formations service such as The Formations Company, which automatically registers you with Companies House and also offers a number of benefits such as business training and banking. You would still need to contact HMRC to register your limited company. There are also quick and easy ways you can register a company youself. MachFast allows you to register a limited company for free on your phone, you can also get a business bank account at the same time.
While the information should give you a helping hand while you register your company, it’s always worth having a discussion with an accountant, as they may be able to highlight the benefits of a certain process, or may even deal with this for you – leaving you free to manage your business.
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