Today it is easy to start a business, the online process can be quite simple; you just have to fill in some forms, pay a small registration fee and away you go. Everyone can start their own business and can also start companies overseas in far away countries that you do not even need to visit. The use of social media expands people’s reach and increases opportunities to be known across countries, this also means that having a company registered in the country that you work with the most could be an advantage over others.
When you want to start a business, you need to jump through the hoops and register properly, with the correct corporate structure and incorporators in place, so that you are considered a proper entity and can follow the processes with the government agencies that regulate business. There are different procedures to follow to register a business but as example, in this article we will try to give you a glimpse of what it is like to register a business.
Most businesses register as a sole trader, limited company or partnership. Now, it is very important to categorise your business depending on the aforementioned types because there are different requirements for each, and different rules each must follow..
- To set up as a sole trader, you need to tell HMRC that you pay tax through Self Assessment. You’ll need to file a tax return every year.
- You must register for VAT if your turnover is over £85,000. You can register voluntarily if it suits your business.
- You must include your name and business name (if you have one) on official paperwork, for example invoices and letters.
- Choose a name for your company, make sure it is not trademarked.
- You must appoint at least one director and clearly define their responsibilities. Then at least one shareholder or guarantor, who can be a director.
- Identify people with significant control (PSC) over your company.
- Keep records about the company itself financial and accounting records.
- You’ll need to register an official address and choose a SIC code – this identifies what your company does.
There are 2 types of partnerships. General partnership and limited partnership.
- A general partnership is an informal agreement between 2 people with no contractual basis, where they are both equally liable for the company
- A limited partnership has boundaries and limitations as set out in a contract or agreement
While registering a business with the state or local government isn’t necessarily required to complete business transactions, it is a smart choice for a new entrepreneur for a variety of reasons. In establishing Business Bank Accounts you need to provide proof that your business is properly registered and, when you apply for small business loans, you’re going to have to prove that you’re actually a business. Lastly, registered businesses need assurance that you are a legitimate business.