How To Register a UK Business in 2025: Everything You Need To Know

Setting up a business in the UK requires registration, and the process varies depending on the type of business you’re starting and the size of your operation. Whether you’re a sole trader, a partnership or setting up a limited company, registering your business is an essential step to ensure legal compliance.

This article walks you through the different business structures and explains the specific registration requirements for each. It also covers the key legal and tax obligations you must meet, such as registering with HMRC for self-assessment and VAT, as well as the potential consequences of failing to register on time. By the end of this guide, you’ll have a clear understanding of the steps involved in getting your business officially recognised in the UK.

Why should I register my business?

Starting a business in the UK is now a popular choice for entrepreneurs, with start-up companies being a common sideliner for those working full-time who want to create an additional income. Some 39% of Brits work on the side – for some, it’s a part-time hustle, for others, it turns into a lucrative business.

With increasing numbers of people interested in how to start a business, it’s arguably even more important to know how to register a business – that is, making sure you’re setting up a business in a legal way.

Companies must be registered to be legally recognised as a business in the UK. At the very least, you’ll need to register with Her Majesty’s Revenue and Customs (HMRC) to ensure you’re paying your taxes to the correct amount and deadline. Other forms of registration for licences may be required depending on the size of your business or should be considered as you grow. These could include registering as an employer – however – 74% of businesses in the UK are non-employing, which means the only employee on the payroll is the owner.

It’s important to note that failing to register your business on time can result in significant penalties. For example, if you don’t register your business with HMRC or Companies House within the required timeframe, you may be subject to fines or interest charges. To avoid such penalties, complete your registration promptly and keep track of important deadlines. check out HMRC guidance for more details on potential fines and penalties.

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What types of businesses need to register?

Every new business in the UK must register, though the process may vary depending on what type of business you have. Here we will explain the features and responsibilities of different business structures. Remember, this information is for educational purposes only; you should consult an expert to meet your specific needs.

How much does it cost to register a business?

Registering as a sole trader or a business partnership in the UK is free. In contrast, registering a limited company involves a fee payable to Companies House. As of 1 May 2024, the standard online registration fee is £50, while postal applications cost £71. These fees are required to officially incorporate your company and obtain a certificate of incorporation. 

How to register a sole trader business

The most common form of small company registration is as a sole trader. All you need to get off the ground is a National Insurance (NI) number. Sole traders get to keep all business profits following tax but remain personally responsible for any loss of profit the business may incur. Sole traders also count as self-employed and must register as such, while ensuring they pay tax and National Insurance. To register a sole trader business, you must do the following:

• Record your expenses and sales
• Pay income tax on your profit and the national insurance rates applicable to you
• Register for value-added tax (VAT) (mandatory for turnover over £85,000, though you can voluntarily register if your turnover is below this, allowing you to reclaim VAT on your purchases)
• Pay any business rates that may be applied to the property you operate from

Include your name and business name on all official paperwork. You do not need an official business name to be a sole trader, nor do you need to register the name you select

How to register as a business partnership

A partnership structure is similar to a sole trader set-up but is shared between several people. Partners must be collectively responsible for losses the business incurs and any bills for stock, equipment, etc. Partners do not have to be individuals; limited companies can also serve as partners in a business. Profit is shared between partners, but each separate partner must pay tax on their share. Partnership company registration requires the following:

• Register a ‘nominated partner’ who is responsible for sending tax returns of the company, other partners must be registered separately and send in their own individual tax returns
• Choose a business name – this does not need to be registered, but it must not violate copyright, be offensive, include words that imply it is a limited company or use words that require official permissions such as ‘accredited’
• Register a business name as a trademark. This is not compulsory but it will stop others from trading under the same name either deliberately or otherwise
• Include your name(s) and business name on all official paperwork
• Register for VAT (optional for businesses with a turnover under £85,000)

Business partnerships must be registered by 5 October in the second tax year since the partnership started trading. Failure to register a business may result in a penalty.

How to register as a limited company

A limited company exists as a separate legal entity to the individuals who own and run it. As such, the business’s finances are not tied to the personal finances of owners or partners. Setting up a limited company requires ‘incorporation’ i.e. having the business registered with Companies House. Limited companies must:

• Pick a company name – limited company names must end in ‘Limited’ or ‘Ltd’ and not duplicate or closely resemble the name of another company
• Choose a business name if you do not wish to trade under the registered company name, this name cannot include ‘Limited’ or ‘Ltd’ in the title, or be the same as another existing company, this can be checked on the Companies House register
• Register a business name as a trademark to prevent other companies from trading under the same title
• Be aware of when and how their name should be displayed
• Ensure they have a UK company location to nominate when registering a business address
• Appoint at least one director whose name and address will be publicly available at Companies House
• Appoint a company secretary if you wish
• Decide on shareholders – this information must be available when you register, there must be at least one shareholder, and there is no maximum number
• Draw up ‘prescribed particulars’ outlining your business structure and precisely what each shareholder is entitled to, including their influence on business decisions
• Create a ‘memorandum of association’ – a legal declaration in which all shareholders agree to start the limited company, this cannot be updated following registration
• Create ‘articles of association’ – the rules about how the company will run, as agreed by all shareholders and directors
• Register for corporation tax within three months of starting business

Registering a business at Companies House

Limited companies must register at Companies House. This must be completed before registering for corporation tax and requires the following:

• A selected company name (which does not copy or resemble other trademark business names or include sensitive or offensive words)
• A company address
• The name of one or more directors
• Nominated shareholders and details of their entitlement
• Your SIC code
• Your ‘memorandum of association’ and ‘articles of association’
• Details of PSCs (people with significant control) of your company, such as those with relatively large shares in the business
• Once you’ve completed the registration, you will receive a ‘certificate of incorporation,’ which confirms that your business is legally recognised. 

Additionally, when setting up your company, you may also want to know how do I register a business name? It’s important to choose a name that complies with Companies House regulations and does not conflict with existing businesses. You can register your chosen business name when submitting your application.

Are there any changes to registering a business in the UK Post-Brexit?

While Brexit has fundamentally changed our trading terms with the European Union and taken us out of the single market, it has not affected how you register a business in the UK.

If you intend to import or export goods, however, you will need to register for an Economic Operators Registration and Identification (EORI) number. The UK’s robust legal system will continue to oversee contracts and business registrations, offering further peace of mind for small business owners.

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Get your business started with Square

Congratulations if you are one of the thousands of ambitious entrepreneurs who start up exciting new companies each year. But after you come up with a great idea and register a business with the likes of HMRC and Companies House, what comes next?

Square can offer a helping hand as your business evolves from a fledgling start-up to a booming success story, supporting your growth while keeping day-to-day operations running smoothly.

Our all-in-one card machine will help you collect payments efficiently right from the start. You will be able to cater for your customers, whether they want to pay using chip and PIN, mobile or contactless cards, giving you one less thing to worry about.

Square’s Point of Sale software will also get you up and running quickly. If you are new to the business world, it can bring you up to speed by managing your sales, payments, records and inventory. It is easy to set up and customise to your company’s needs.

And as your business expands, Square Online can instantly boost your digital presence with a free online store. Companies can start selling over the internet by building a website with us – and even offer local delivery and click-and-collect services.

FAQs

How can I check if a business is VAT registered​?

If you want to know how to check if a business is VAT registered​ in the UK, you can visit the official HMRC website and use their VAT number validation tool. Simply search for how to check if a business is VAT registered on the HMRC site, where you can enter the business’s VAT number to verify its registration status. Alternatively, you can contact HMRC directly for assistance.

Do you have to register a business​?

In the UK, whether you need to register a business depends on the type of business you’re running. If you’re operating as a sole trader and your income is above the £1,000 trading allowance, you must register with HMRC for Self Assessment. If you’re setting up a limited company, you must register with Companies House. Additionally, if your business turnover exceeds the VAT threshold (currently £85,000), you’ll need to register for VAT. Always check the specific requirements based on your business structure.

Can I register a business at my home address?

Yes, in the UK, you can register a business at your home address, especially if you’re a sole trader or operating a small business. However, if you’re using your home address, check if your local council has any regulations regarding home-based businesses, such as planning permissions. For VAT registered businesses, you can also use your home address for VAT registration, but you may need to update HMRC if you change your business location. For more details on how to check if a business is VAT registered, refer to HMRC’s resources.

How do you register a food business​?

In the UK, to register a food business, you need to inform your local council at least 28 days before you start trading. You can register online or by filling out a form from your local council’s website. The registration process typically includes providing details about your business, such as the type of food you’ll be handling and your premises. To find out more about the process, search ‘how to register a food business’ on your local council’s site or consult the Food Standards Agency (FSA) for guidance.