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How to register your business in 13 relatively easy steps

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Entrepreneurs

How to register your business in 13 relatively easy steps

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By Maddyness - 10 February 2020 / 07H51 - Updated 17 February 2020

Are you an entrepreneur? Maddyness has created a true kit of different steps to follow in creating, growing, and even selling your own startup. From hiring to protecting your brand and moving on to financing your innovation, you will find tips and good practices so that you can easily find your way in the entrepreneurship labyrinth. In this article: the steps you must take when starting a business.

Too long? Here’s the key takeaways

  • Articles of association are important for the life of a business. Don’t forget to write to them and if you need help, just ask
  • Be meticulous. Do things in order and take the necessary time
  • Make sure you have completed all the steps
  • Don’t neglect the extra steps. They will help you save precious time in the future

Step 1. Deciding which documents your company will need for registration.

If your business is registered as a limited company, you will need to draft the articles of association and a memorandum of association.

Step 2. Choose a business location.

You can choose to have your business in your own office, in an office that accommodates businesses (co-working spaces, incubator, accelerator, etc.), or at your house or the house of one of the co-founders.

Step 3. Decide what each one of the founders will bring to the company.

If there are several co-founders, agree on the amount of money that each one is willing to bring to the capital of the company. This will allow you to create a list of beneficiaries, which is a list of people who possess or control, directly or indirectly, the company. Also establish a list of what each person is bringing to the company, whether it be something physical (materials, vehicles, business funds, outside money, etc.) or intangible assets (specific knowledge, previous jobs that will help the future business, etc.). This will influence how you divide the unalienable shares of the business capital. To validate the list, you will need the services of an investment advisor, appointed unanimously by partner shareholders or, if a consensus is not possible, by the president of the commercial court where the business is located. The latter will submit a report that will validate the reality of the contributions. NB: if expenses related to the company occur before your register your business, they must be carried out “in the name and on behalf of the company XXX during training” and listed in a document that must be signed by the partners and added to the articles of association.

Step 4. Issue the initial shares of the company.

This involves supplying a statement of capital, which includes the company’s share capital and the names and addresses of all shareholders.

Step 5. Appoint the representatives.

For a partnership, you and your partners must choose a representative who will manage the partnership’s tax returns and keep the business records, they will be the person to represent the company legally to third parties. The nominated partner will register for Self-Assessment with HM Revenue and Customs.

Step 6. Appoint an account auditor.

This must be carried out if the company is not exempt from audits, which may be the case if the company has no more than 50 employees, has an annual turnover of less than £10.2m, or has assets worth no more than £5.1m.

Step 7. Register the necessary documents.

When registering your company you’ll need to create both a ‘memorandum of association’ – a legal statement signed by all initial shareholders or guarantors agreeing to form the company and the ‘articles of association’ – written rules about running the company agreed by the shareholders or guarantors, directors and the company secretary. If you register your company online, the memorandum of association will automatically be created for you as part of registration. The articles of association can be drawn up from a model, or you can draft your own and send them when you register your business.

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Step 8. Draft the articles of association.

The articles of association have an informative role – they present information in a general order about the business such as where it is located or its line of business – and a role of sound governance – describing what the company does and the conditions of management or dismissal of directors.

After these last steps, you’re probably excited to formally start your business, but the articles of association shouldn’t be written too hastily. It’s important to draft them methodically. Many professionals (lawyers, solicitors, etc.), as well as other startups, can help you with this process. Think about adding the list of what each partner is bringing to the company to the articles of association. NB: if you have a public limited company, articles of association can be completed through a shareholder’s agreement. Get help when drafting your documents, it will help you save time and you will have a peace of mind when starting the next steps.

Step 9. Register your company.

The registration process for businesses is completed through Companies House. All of the relevant information that you will need before you start the process and register your business can be found at gov.uk.

Step 10. Your company address.

Before registering your company with Companies House, make sure that you have a valid UK address for your company. The address can be a P.O. box, but you must also have an office address linked to the company, which can even be your home address if that is where you are working from. The address that you register must be in the same country that your company is registered in. For example, a company registered in Scotland must have a registered office address in Scotland.

Step 11. SIC codes.

When you go to register your business, you’ll have to use the SIC code (Standard Industrial Classification code) that is appropriate for your line of business. These codes classify business establishments by the type of economic activity in which they’re engaged. You will need to find out which SIC code corresponds to your company when filing to Companies House.

Step 12. Register your company with Companies House.

Now is the time! You’re finally ready to register your business and call yourself the real deal. The process is online, which means that your company will be registered within 24 hours of submitting the application, and costs only £12. You will need to create a Government Gateway user ID and password for your business as you cannot use your personal one. Next, you will be required to provide three pieces of personal information about yourself and your partners.

These can include:

  • Town of birth
  • Mother’s maiden name
  • Father’s first name
  • Telephone number
  • National insurance number
  • Passport number

Then, you’ll receive a ‘certificate of incorporation’. This confirms the company legally exists and shows the company number and date of formation. If you’d like to complete the registration process by post, you can but the processing time is 8 to 10 days and it costs £40.

When you register your business with Companies House, you will also be registered for Corporation Tax at the same time.

Step 13. Registering for Corporation Tax.

Once you’ve sent in your registration with Companies House, you’ll need to register your business for Corporation Tax. This needs to be done within 3 months of starting a business, or you can get a penalty if you register late. When registering, you’ll need your company’s 10-digit Unique Taxpayer Reference (UTR). You’ll receive this number at your company address by HMRC within 14 days of the company being registered. You will also need the company’s Government Gateway user ID and password in order to start the process.

To register you must provide:

  • Your company’s registration number
  • The start date of your business
  • The date your annual accounts are made up to

And that’s it! You’re registered. HMRC will let you know when the deadline is to pay your Corporation Tax.

Be meticulous. Take your time to make sure that you completed each step correctly.

And after?

Insure your company. Insuring your company is mandatory in certain sectors and, in all cases, it is better to protect yourself and your company from unexpected danger.

Think about your accounting. Having someone else do your accounting isn’t mandatory but it can help you avoid a lot of headaches. There are several options when it comes to accounting. You can use the services of an approved chartered accountant or join a certified management organisation.

Join a workplace pension fund. Once you hire your first employee, you will need to join a workplace pension fund. Premiums for employee retirement are compulsory if you have employees that are aged between 22 and the State Pension age and who earn at least £10,000 per year. Employers and employees must pay into the employee’s fund each month.

Don’t forget about these processes, they’ll all be useful in good time. After having registered your business, you can dedicate some extra time on these steps!

Read also
By

Maddyness

10 February 2020 / 07H51
Updated 17 February 2020
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