Tips for Setting up a New Business
Forming a new company can be an exciting and confusing time. If you have decided that you want to set up a new business, there are a few processes that you will need to complete. What you need to do with regards to registering will depend on the type of business that you set up. Most businesses in the UK register as either a sole trader company, a partnership or a limited company.
A sole trader business is the easiest to set up and takes very little work with regards to registration. If you are going to operate as a sole trader, you will need to register with HMRC and let them know that you plan to become self-employed. As a sole trader, you are going to be personally responsible for any debts that your business incurs and there are a few accounting responsibilities that you will need to note.
Partnerships are much like sole trader businesses with regards to their legal structure. A partnership is a business that is started by two or more people who want to run the business together. Partnerships must also be registered with HMRC and there are a few more accounting responsibilities with this type of business entity than there are with sole trader businesses.
If you are planning on setting up a limited company, you will keep the company finances separate from your personal finances. Limited companies provide limited liability for company owners, meaning that your personal property and assets are protected should your business go under. Limited companies must be registered with Companies House and there are more stringent accounting practices and responsibilities that must be met in order to form and run a limited company.
You may have other responsibilities to meet before you form your company, depending on the type of business that you are planning to start. You will need to check and determine if any licenses or permits are required for your business. For instance, selling food or trading in the streets typically require certain permits before these businesses are legal. You may also need insurance for your company, again depending on what you are planning to do.
There are also requirements that must be met if you plan to sell goods online, store or use any personal information from customers, purchase or sell goods abroad, and depending on where your business is located. If you are running your business from home for instance, there are different requirements than if you were forming a limited company and running it from a warehouse.
Forming a company and registering it are simple processes that can be done by nearly anyone. The type of business that you form will have a bearing on the process so you should check the specific formation types and determine what you need to do depending on the type of business and legal structure for your company. If you have questions about forming or setting up a new company, you can speak with an accounting, a solicitor or work with a company formation agent.