When setting up a company in the UK, you need to select a specific structure for the type of business or organisation. Basically there are three types: sole traders, partnerships and limited companies. Sole traders are considered to be self-employed which means they typically work for themselves and will need to register as a sole trader. If conducting it as a partnership or a limited one, you must live in the UK or have an office that is registered and one director residing in the country. UK leading experts and specialise in limited company formation and registration, which is easily carried out through an online process. Company registration is different for each of the three types of businesses.
Registering as a Sole Trader
Getting set up as a sole trader is perhaps the easiest method of formation. Sole traders must calculate their own tax liability which requires registering for self-assessment tax with HMRC (HM Revenue and Customs). Some sole traders find it easier to employ the services of an accountant to assist in these tax calculations. A National Insurance (NI) number is required as well. Sole traders may conduct business under a company name or using their own name.
Registering as a Partnership
This operates like a sole trader except there are several owners rather than just one. Each partner may run the business as an individual but responsibility is shared between all partners including any bills incurred and any losses. As with the sole trader business, partnerships must also register for the self-assessment tax with HMRC and pay for National Insurance. Each partner must also pay their own income tax on the individual share of their profits from the partnership.
There are also specific rules for naming a partnership. For example, terms like “limited” or “limited liability partnership” are not allowed. The name of the partnership must not closely resemble any similar registered trademark or allude to any connection with government authorities. Partnerships must include the names of all partners along with the business name on any official forms like letters, invoices, etc. Continue reading