How to Set Up a Business in the UK

Running a business is not everyone’s cup of tea – you need to have a great idea that can find a market and you need the skill to implement your plans to ensure commercial success. One of the key things to get going is to have the right kind of start, which involves setting your business up with the best possible structure so that the initial few months can go along smoothly. Here are things that you should consider while setting up a business in the UK.

Getting your Business Registered

Before you can commence any commercial activity, you would need to get your business registered. You have three different options for how you can register your business, depending on certain factors specific to your case.

Sole Trader

If you are planning to operate something like a ‘mom-and-pop’ business or any small boutique firm, you could choose to set yourself up as a sole trader. In this case, you would be personally responsible for any business debt that you would take on, along with having to fulfill some accounting responsibilities. Here is how you can go ahead with registering as a sole trader.

Partnership Firm

If you are setting up the business as a collaborative venture with two or more people, you might want to consider setting up a partnership firm. In a partnership firm, the individual liabilities of partners are limited to the proportion of stake that they hold in the firm. If you need to set up a partnership firm, here is how you can proceed

Limited Company

You could set up a limited company if you wish to be insulated from the liabilities of the business. However, you would need to meet considerably higher responsibilities and reporting requirements. You can follow this guide to set up a limited company.

Other Primary Requirements to take care of

Depending on the nature of your business, you would have to fulfil few other responsibilities as well. For example, you will need to obtain different licenses depending on the nature of your business activity. To find out what licenses you would need, you could follow this link.

Another critical aspect to worry about is having insurance. To know all about different types of insurances that you may need, you could refer to this link which will guide you regarding the same.

Employing People

Any business will need to employ people as it grows. And there are various responsibilities that employers have to fulfil towards their employees in order to safeguard their interests. The following are the basic responsibilities you will have to handle when you recruit a workforce for your business. Aside of that, you would also have to:

– Pay them salaries and maintain a payroll record accordingly
– Provide workplace pensions to those staff who are eligible for it.
– Pay the National Insurance for employees (This is a compulsory requirement, but you could claim an allowance if your business is eligible.

Aside of full-time employees, you may choose to enter into a contract with agency workers. In this case, you would have to meet responsibilities on the employer side for hiring agency staff. In addition, you may also recruit freelancers who bring in special skills that you may temporarily need. If you do so, you would need to be mindful of the terms for contracting them.

With a high per capita income, the UK can be a highly lucrative market for setting up a business. However, as with any developed country, businesses can be expected to meet certain stringent compliances and regulations which may vary depending on the nature of the business and the sector that it operates in. This post will help you make some of the critical initial-stage decisions which will help you run the business smoothly.