How to Register a Business in the UK
Rosie Goymour
Registering your business is one of those tasks that looks more complicated than it is. The UK process for both sole traders and limited companies is reasonably straightforward, and for most people starting out, you can complete it yourself in an afternoon. What takes longer is making sure you have done everything that needs to follow the registration itself. This guide covers both structures step by step and explains what else you will need to put in place before you start trading properly.
Choose your structure before you register
The registration process is different for sole traders and limited companies, so the first step is knowing which one you are setting up as. If you are still weighing that up, the guide to choosing between a sole trader and limited company covers the main differences in more detail.
In brief, a sole trader is the simpler, lower-admin option for most people starting out. A limited company is a separate legal entity and involves more formality, but it provides limited personal liability and can be more tax-efficient once profits reach a certain level. Most people have a clear sense of which they want before they get to the registration stage. If you are genuinely unsure, a short conversation with an accountant before you register is worth the time.
How to register as a sole trader
Registering as a sole trader is primarily a matter of telling HMRC you are self-employed and setting yourself up for Self Assessment. There is no Companies House registration, no incorporation process, and no fee. The steps are:
Decide on a trading name. As a sole trader you can trade under your own name or a business name. A trading name cannot be the same as an existing registered trademark, cannot include words like "limited" or "Ltd", and cannot imply a connection with government. Keep it simple and easy to find online.
Register for Self Assessment with HMRC. You need to do this by 5 October following the end of the tax year in which you start trading. If you began in May 2025, the deadline was 5 October 2025. You can register online at gov.uk and it takes around 10 minutes. HMRC will send your Unique Taxpayer Reference (UTR) by post within a few weeks.
Set up your bookkeeping from day one. You will need records of your income and expenses to complete your Self Assessment return each year. A spreadsheet works for simple affairs; accounting software makes it easier as things grow. The habit matters more than the tool you use.
Consider VAT registration. VAT registration is compulsory once your taxable turnover exceeds the current threshold in any rolling 12-month period. Below that threshold it is optional. Some businesses choose to register voluntarily, particularly if their customers are VAT-registered businesses who can reclaim VAT anyway. It adds administration, so it is worth thinking through before you register voluntarily.
Check whether you need any licences or permits. Depending on your industry, you may need specific licences to trade. Food businesses, childcare providers, financial services firms, and healthcare practitioners all have additional requirements beyond basic registration. The gov.uk licence finder is a reasonable starting point for checking what applies to your sector.
There is no certificate, no formal approval process, and no waiting period beyond receiving your UTR. You are trading legally from the moment you start, provided you meet your registration deadline.
How to register a limited company
Registering a limited company is more involved than becoming a sole trader, but the online process through Companies House is considerably more accessible than it once was. A straightforward single-director, single-shareholder company can be registered in one sitting.
Choose your company name. The name must be unique on the Companies House register and must not be the same as, or too similar to, an existing registered name or protected trademark. It must end in "Limited" or "Ltd" (or the Welsh equivalents if you are registering in Wales). You can check name availability on the Companies House website before you start.
Confirm your registered office address. Every limited company needs a registered office address in the UK. This is where official correspondence from Companies House and HMRC will be sent, and it appears on the public register. It can be your home address, a business address, or a registered office service if you would rather keep your home address off the public record.
Appoint at least one director. A director is legally responsible for running the company and must be at least 16 years old. You can be the sole director of your own company. Directors' names and addresses are filed with Companies House and are publicly searchable, though you can use a service address instead of your home address.
Set up your share structure. You need at least one shareholder. For most people setting up alone, this means issuing one ordinary share to yourself at a nominal value of £1. If you are incorporating with co-founders or intending to bring in investors, the share structure needs more thought and is worth discussing with a solicitor or accountant before you register.
Prepare your memorandum and articles of association. The memorandum is a short document signed by the founding members confirming their intention to form the company. The articles govern how the company is run. Companies House provides a set of model articles that work well for most small companies and are the default if you do not file your own.
Register online with Companies House. The standard online registration fee at time of writing is £100 and the process typically takes 24 hours. You will receive a Certificate of Incorporation confirming your company registration number and the date it was incorporated. Same-day registration is available for a higher fee.
Register for Corporation Tax. You must notify HMRC that the company is trading within three months of starting business activity, not within three months of incorporating. HMRC sends a letter after incorporation prompting you to do this. Register promptly to avoid penalties and interest on any tax that falls due.
Set up PAYE if you plan to take a salary. If you intend to pay yourself a salary through the company, you need to register as an employer with HMRC and run payroll. Many accountants include this as part of their standard service for limited company clients.
What to sort out after you register
Registration is the beginning of the process, not the end. A few things that commonly catch people out in the weeks that follow:
Open a business bank account. For limited companies this is a practical necessity. Company finances must be kept separate from your personal finances, and you need an account in the company's name to pay suppliers, receive payments, and run payroll. For sole traders it is not a legal requirement, but keeping business and personal money in separate accounts makes bookkeeping considerably easier and looks more professional to clients. You can compare business bank accounts on HowMuch to see what is available for new businesses.
Get appropriate insurance in place. Depending on what you do, you may need public liability insurance, professional indemnity insurance, or both before you start work. Some industries have their own specific requirements. If you take on employees, employers' liability insurance is a legal requirement from the day your first member of staff starts. This is worth sorting before you begin trading, not as an afterthought.
Consider VAT registration if you have not already. If your turnover is approaching the current compulsory registration threshold, it is worth registering before you hit it rather than rushing to catch up. Once you exceed the threshold in a rolling 12-month period, you have 30 days to notify HMRC.
Frequently asked questions
How long does registration take?
Sole trader registration is effectively immediate once you submit your Self Assessment registration to HMRC, though your UTR typically takes a few weeks to arrive by post. Limited company registration through Companies House online generally processes within 24 hours. A same-day service is available for an additional fee if timing matters.
Do I need a solicitor or accountant to register?
Not legally. Both processes can be completed by anyone without professional help. That said, for a limited company with more than one shareholder, a complex share structure, or outside investment, getting advice before you incorporate is worth the cost. Getting the structure right at the outset is considerably cheaper than changing it later.
Can I register a business name without forming a company?
Yes. As a sole trader, you can trade under a business name without registering it anywhere. There is no legal requirement to register a trading name. A trading name is not protected by registration alone, however. If the name matters to you commercially, looking into trademark registration separately is worth considering.
What is a UTR and do I need one?
A Unique Taxpayer Reference is a 10-digit number HMRC uses to identify you for Self Assessment. You receive one when you register as a sole trader. If you form a limited company, the company receives its own UTR as well. You will need both your personal and company UTRs on various filings throughout the year.
What happens if I miss the registration deadline?
For sole traders, registering for Self Assessment after the October deadline can result in a penalty from HMRC. Penalties are generally proportionate to the amount of tax involved and can sometimes be appealed if you have a reasonable excuse, but registering on time avoids the problem entirely. For limited companies, failing to register for Corporation Tax within three months of starting to trade is a separate issue and can result in penalties and interest on unpaid tax. HMRC takes both seriously.
This article is for informational purposes only and does not constitute financial advice. Always seek independent advice before making financial decisions.
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