A Guide To Creating A New Business
The process of setting up a new UK business can be confusing and tricky, but we’ve laid some tips out for you here.
Creating a new company is simultaneously terrifying and exhilarating. The pressure of being solely responsible for a new enterprise can seem overwhelming, yet the excitement and sense of achievement in becoming self-employed can make any number of late nights and form-filling seem entirely justified.
The first step is to identify an appropriate name for your new enterprise, ideally with some relevance to your chosen industry or geographic location. Kings Road Cupcakes leaves little ambiguity about either of these aspects, which is great for emphasising your local presence and attracting potential customers. While many people want to name their nascent company after themselves or a loved one (Linux variant Debian combines the names of its founder and his ex-girlfriend), a company name should at least hint at its purpose and areas of expertise.
To choose a name, one option is to visit the UK’s Companies House website and view the complete list of active, dormant and obsolete company names. Pick a title that can’t be confused with an existing company, and for similar reasons ensure the relevant .co.uk or .com domain name is still available (you can check that here). Companies House is the Government agency responsible for registering new businesses, and their website is the portal where essential information like trading addresses and directors must be recorded. At least one person must be a shareholder of a limited company, though this is a technicality far removed from the stock market. A single director will typically award themselves one ordinary share worth £1, which grants them ownership of the company and ultimate control over future decisions.
Specialist agencies can help with the more technical aspects of registering a company, such as the articles of association that govern how the firm will be run. These agencies will register the company with their staff as directors and shareholders, before instantly resigning and handing ownership over to you. This isn’t as suspect as it sounds, although it does cost more than the DIY approach. However, self-registering with Companies House involves drafting articles of association and a statement of capital (declaring who owns which shares and what corresponding rights are attached), which can be challenging for less analytically-minded individuals.
Once a company has been registered, the financial responsibilities begin. Corporation tax is levied at 20% on net profits – anything over and above essential expenditures like stock purchases or salaries – and new firms have just three months to register. It’s also crucial to get an accountant on board from day one, generating end-of-year accounts for Her Majesty’s Revenue and Customs. If you’re not particularly fiscal, an accountant can also supervise your personal tax affairs and process the forms that will be required from you and the company. Tax and accounts are two hugely complex (yet highly distinct) sciences, and navigating either requires extensive financial know-how.
A new company also needs marketing to make prospective customers aware of its existence. Essential components of any marketing plan should include a website with written content optimised so that search engines can find it, a modest advertising budget for outlets like Yell or Google Ads, and printed literature such as flyers or brochures. Many firms rely on repeat custom and word-of-mouth recommendations in their later years, but establishing that solid customer base requires self-promotion and expenditure at the outset. Not to mention excellent communications skills, dogged determination, and a flair for your chosen industry or niche…
Once you’re all set up, visit this blog post for information on getting your business online.