How to Start a New Trading Company in UK?: Procedure, Document Required, Type of License, Setup Cost

Procedure to Start a New Trading Company in the UK

1. Determine your trading company’s structure. Private limited corporations (Ltd) and limited liability partnerships (LLPs) are the most frequent structures in the United Kingdom. The type of work you conduct will determine how you set up your firm. It can also affect how you pay taxes and receive money:

Check to see whether you should register as one of the following instead:

  • self-employed (‘sole trader’)
  • a business partnership
  • a social enterprise
  • an overseas company
  • an unincorporated association

2. Select a unique and suitable name for your trading company. Ensure the name complies with the naming guidelines set by Companies House, the UK’s registrar of companies.

3. Appoint directors and shareholders for your company. Directors are responsible for managing the company, while shareholders own the company and may have different rights and responsibilities. A director must be appointed, although a company secretary is not required. At least one shareholder or guarantor, who can also be a director, is required.

4. Determine who has significant control (PSC) over your firm. For example, anyone with voting rights or more than 25% of the shares.

5. Prepare the company’s articles of association and memorandum of association, which outline the internal rules and regulations for running the company. You can use the standard model articles or draft your tailor-made articles.

6. Open a business bank account to keep your company’s finances separate from personal finances. Prepare the required documents and visit the bank to complete the account opening process.

7. Register your trading company with Companies House. You can do this online or by submitting the necessary documents by post. The required documents typically include the completed application form, memorandum and articles of association, and details of directors and shareholders.

8 For further information, check here.

Documents Required

  1. Memorandum of Association: This document outlines the company’s name, registered address, objectives, and details of the initial shareholders. The shareholders must sign it in the presence of witnesses.
  2. Articles of Association: The articles of association define the company’s internal rules, regulations, and governance structure. You can use the standard model articles provided by Companies House or draft your customized articles.
  3. Completed Application Form: You must complete the appropriate application form to register your company with Companies House. The form typically includes company name, registered address, company officers (directors and company secretary), and share structure.
  4. Director and Shareholder Details: You will need to provide the full names, addresses, and other relevant details of the directors and shareholders of the company. This information will be included in the application form and the statutory registers.
  5. Registered Office Address: The registered office address is the company’s official address. You must provide the address where the company’s statutory documents will be kept and where official correspondence will be sent.
  6. Statement of Capital: For a private limited company, you must provide a statement of capital, which details the company’s share capital, the number of shares, and their nominal value. This document is part of the application form.
  7. Identification Documents: You must provide identification documents for each director, shareholder, and company secretary. This typically includes a copy of their passport or national identity card and proof of address, such as a utility bill or bank statement.
  8. Business Plan: While not a mandatory document for company registration, having a business plan is essential for outlining your company’s objectives, strategies, and financial projections. It is useful for internal planning and when seeking funding or support.
  9. Licenses and Permits: Depending on your business activities, you may need to provide copies of any licenses or permits required for your industry. This could include licenses for trading certain goods, operating in specific sectors, or complying with health and safety regulations.

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