There’s a lot to think about when setting up a business, whether you’re a sole trader or opening a limited company. One of the questions you may have is who you need to register with.
You will need to tell HMRC that you’re self-employed and operating as a sole trader so that you can fill in Self-Assessment tax returns and pay the right amount of tax you owe.
But do you need to register with Companies House?
What is Companies House?
First of all, what is exactly is Companies House? Companies House is the UK’s registrar of companies. All companies are required to be incorporated and registered with Companies House. All limited companies have to file financial statements as well as company returns to them, unless exempt.
Do you need to register as sole trader?
As you’re only setting up as a sole trader you won’t have to be registered with Companies House. Only those who wanting to register as a limited company are required to register. You will still have to be registered with HMRC for Self-Assessment though.
How to register
If you change your mind and decide that you’d rather operate as a limited company, then you will need to register with Companies House as soon as possible. You will need to register within three months of starting your business in order to be trading legally.
In order to register your company you will need to register either online or by post. Doing it online is quicker and cheaper. It costs £12 and your company is usually registered within 24 hours.
If you do it by post, you’ll need to fill out a IN01 form. This method takes longer, usually between 8 and 10 days and will cost you £40. This will need to be made out in a cheque to Companies House.
To speed the process up and get your company registered on the same day, you’ll need to get your application in to Companies House by 3pm and pay a £100 charge. You will also have to mark your envelope as “same day service” in the top left hand corner.
After registering, you’ll get a Certificate of Incorporation which confirms your company exists legally. It will also show your company number and the date of formation, both of which will be important for when you file your tax returns so keep it safe.
Do you have any more questions or thoughts on this? Let us know what you think. If you need more information about registering a company, you can visit the government’s website here.