5 Things to Consider Before Registering a StartUp in the UK
5 Things to Consider Before Registering a StartUp in the UK
Are you thinking of starting your own business? If so, you’ll need to consider several important factors before setting up a business in the UK. For instance, obtaining licences and permits, understanding taxation and employment law, and developing a robust business plan.
Besides, you must have an effective business growth plan and a hiring strategy to ensure you start and scale your business correctly. This article will outline five key things to consider before starting your business in the UK.
Your Name
The last thing you’d want is your licence to be put on hold because your name on various documents doesn’t match. For example, “Mr John” on the application form can’t be “John Smith” on your passport. So make sure your name is consistent across all documents. Therefore, change your name, if required.
When choosing your business name, keep these tips in mind:
- If you’re using a pseudonym, check that it’s not already in use and isn’t too similar to an existing trademark.
- Your business name shouldn’t be offensive, misleading or imply a connection with the government or royal family.
- You’ll need approval from the relevant public body if you want to use a sensitive word or phrase in your name.
- Check online and in the telephone directory to see if your proposed business name is already in use.
Your Business Structure
The right business structure for your startup will determine how much control you have over the business, your personal liability, taxation and reporting requirements.
The four most common business structures in the UK are:
- Sole trader: With this structure, you’re self-employed and run the business independently. You have complete control but are also personally liable for any losses incurred by the business.
- Limited company: A limited company is a separate legal entity from its owners. This means that the business isn’t liable for any debts incurred by the owners. The downside is that there are more paperwork and reporting requirements.
- Partnership: Partnerships are similar to sole traders but with two or more people running the business. Each partner is jointly liable for the business’s debts.
- Limited liability partnership (LLP): LLPs are designed for professional services businesses with two or more partners. Each partner has limited liability, but the business isn’t a separate legal entity.
Your Location
You may already have premises in mind, or you may need to look for one.
Either way, it’s important to consider the following factors when choosing a location for your startup:
- Zoning: Zoning laws determine how the land can be used. You’ll need to check that the zoning for your premises allows for commercial activity.
- Business rates: Business rates are a tax on commercial properties. You can find out how much you’ll need to pay by contacting your local authority.
- Building regulations: If you’re planning to renovate or make changes to the property, you’ll need to ensure that these comply with building regulations.
Your Licences and Permits
Depending on your business, you may need to apply for licences and permits from your local authority. For example, businesses that serve food or alcohol will need a licence from their local council. You can apply for licences and permits online through the government’s licensing portal.
Your Taxation Obligations
You’ll need to register for value-added tax (VAT) if your business has a turnover of specific amounts that may vary by region. You’ll also need to pay income tax on any profits you make. The amount of tax you’ll pay will depend on your business structure and how much profit you make.
Final Word
Starting a business in the UK can be challenging, but getting everything right from the beginning is important. By following these steps and doing your research, you can ensure that your startup is off to a good start. For more detailed information you can check out our guide “How to register a business name in the UK”.
