If you are forming a new company, you will need to decide if you are going to operate as a sole trader, a partnership or a limited company. One of the main questions that new business owners have is whether or not they need to register their company with Companies House. No matter what type of business entity you form, you are required to register with HMRC to let them know that you are going to be self-employed. This is true even if you are operating as a sole trader. HMRC will need a self-assessment which will be used to determine your tax. Certain legal entities however, must also register with Companies House to begin trading legally.
Companies House is the registrar of companies in the UK. All companies that are incorporated are legally required to register with Companies House prior to trading. All limited companies are also required to file financial statements and company returns each year with Companies House, unless they are exempt from doing so.
If you are forming a sole trader business, you are not required to register with Companies House. This is also true of business partnerships. Only limited companies are required to register their companies with this governing agency. But as a sole trader, you are still required to register for self-assessment through HMRC.
Some businesses start out as sole traders and then change to operate as limited companies. If you do this, then you will need to register your company with Companies House or a company formation agent before you begin trading as a limited company. Once you change your business structure and begin operating as a limited company, you will have to register within three months of trading to be in legal compliance.
To register, you will need to file an application and you will need to determine if you want to register via post or online. If you register online, the fees are lower and you will get through the process much faster. You will need to fill out the IN01 form, which is the registration application. Note that when you do register as a limited company, there are other forms that must accompany your application. You will need to also draft a memorandum and an article of association. The names and addresses, along with other information, pertaining to your company director or directors and your shareholders must also be submitted to Companies House with your application.
After you have successfully registered your business, you will receive a certificate of incorporation. This is a document that proves that your company exists legally. The document will have your company number and the date of your formation and these are both required on your tax returns. If you are set on forming a sole trader business, you will not need to do anything except register with HMRC for self-assessment. However, if you choose down the road to incorporate your business, you will need to follow the steps set forth by Companies House for registration.