If you want to start a business in the UK – as a UK resident or non-resident – you should first evaluate whether or not you are permitted to. This is because, w hilst the rules on who can register a UK business are fairly relaxed, there are some restrictions in place.
In this article, we explain what it means to register a business in the UK and look at who can and can’t do this.
There are two main ways you can ‘register’ a business:
A sole trader and a limited company are two very different structures through which you can run your business.
With a sole trader, there is no legal distinction between the person and the business; y ou are essentially the business. If the business were to encounter financial difficulties or be sued, the owner’s personal assets would be at risk.
Comparatively, in a company limited by shares, the owners (known as the shareholders ) are legally separate from the business itself. This provides financial protection if the company were to accrue debts or face legal action.
If you intend to operate as a sole trader, you will need to register your business with HMRC if you earn more than £1,000 during a tax year. By contrast, if you wish to operate your business through a limited company, you need to register the company with Companies House before you start trading.
For more information about the advantages and disadvantages of both structures, we recommend reading this article: Sole trader or limited company?
Registration as a sole trader is simple. You need only basic information about your business (namely, the business’s trading name).
You can register as a sole trader regardless of your nationality and place of residence, provided that you have a National Insurance (NI) number. If you don’t have an NI number, you can apply if you are currently living in the UK and have the right to work in the UK. You cannot apply from outside of the UK.
NI numbers are automatically allocated to UK residents just before their 16th birthday. H owever, you can apply for one earlier if you have not yet reached your 16 th birthday. You can also register as a sole trader even if you have been declared bankrupt or if you have been disqualified from being a company director.
See here for more information about registering as a sole trader , including how to get started.
To register a private company limited by shares , there are some eligibility requirements you and your company need to meet. Firstly, you will need at least one shareholder and one director . The good news is that t his can be the same person taking on both roles, which means you can set up a company all by yourself. Alternatively, you can have multiple people taking different roles .
The law provides very few restrictions on who can be a shareholder, so virtually anyone can take up shares in a UK company. Nationality, location, and age do not matter, and you don’t need an NI number.
A key point to note is that, whilst a child can be a shareholder, there may be contractual issues in them doing so. You should take professional advice as to whether this is a good idea.
When it comes to the role of the director , there are a few rules to note . Nationality and place of residence still do not matter and, again , there’s no need for an NI number. But to be a director, an individual mus t :
A person can be disqualified from being a director for a number of reasons , all of which are related to unfit conduct in a previous directorship. However, if an individual has not been a company director before, they will not be disqualified.
As you can see, the rules on who can register a company are relatively relaxed. However, to set up a company in the UK, the company itself will need to meet an additional requirement: having a UK-based registered office address .
A registered office address is the company’s ‘official’ address. Amongst other things, this is where government bodies such as Companies House, HMRC, and the Information Commissioner’s Office will send their correspondence.
Any address (including residential, although this is not recommended for privacy reasons ) can be used as a registered office address, provided that:
As a result, companies have quite a bit of flexibility on the address they can use, such as using a registered office address service .
To summarise, whilst there is a requirement for you to use a UK address when setting up a UK company, in practical terms, this is easily solvable and does not prevent non-residents from setting up a company in the UK.
Now you know whether you can register a business in the UK. Although there may be additional practical considerations, it is relatively easy for anyone over the age of 16 to set up a business in the UK .
If you have decided that a company limited by shares is the right route for you and your business (and you meet the directors’ qualifying criteria ), we can help register your company through our range of company formation packages , where prices start from £2.99 (excluding the £100 Companies House fee).
What’s more, if you are a non-UK resident, we offer dedicated Non-Residents Packages from £99.99 (excluding the £100 Companies House fee) that provide you with everything you need to register a company in the UK, including our Registered Office Address Service.