How to register a business in the UK

When do you need to register a business?

Not every business needs to register immediately, but it’s a step you’ll need to complete at some point. This is often driven by when you start trading, how much you earn, and specific registration deadlines.

You’ll usually need to register when:

• You start earning money from your activity
• You intend to trade on a regular basis
• Your income exceeds the £1,000 trading allowance
• You want to formalise your business for tax, banking, or credibility reasons

Consider the tax year you start trading in. Register by the 5^th October before your first tax return (in January). Registering too late can lead to penalties; registering too early can create unnecessary admin.

How long does business registration take?

• Sole trader registration: same day
• Limited company registration: usually within 24 hours
• Trademarks: several months

Plan ahead if you’re working to a launch date. Registration isn’t bureaucracy for its own sake, it’s about protecting yourself, your income, and your time, and putting the right foundations in place as your business grows.

How to register a business

Registering a business starts with two key decisions: choosing the business type that’s right for you and following the registration process accurately. While it can feel daunting at first, for most independent businesses the process is short, straightforward, and completed online.

The steps you need to take depend on whether you’re registering as a sole trader or setting up a limited company, both common options for freelancers, contractors, and micro-businesses. The sections list each route clearly and simply.

Registering as a Sole Trader

1. Choose your business name
2. Register for self-assessment with HM Revenue & Customs
3. Set up a simple system for tracking income and expenses
4. Understand your annual self-assessment tax deadline

Typically, you will register as a sole trader if you’re earning income from a side business, over £1000. You could be a freelancer, contractor and employer, although you could also be registered as a limited company.

Registering a Limited Company

1. Choose a company name
2. Check availability and restrictions
3. Register with Companies House
4. Appoint directors and shareholders
5. Set up a business bank account

If you’re unsure which structure suits your situation best, it’s worth taking time to understand the differences before registering, as changing later can involve additional admin and cost.

How much does it cost to register a business in the UK?

Core registration costs

• Sole trader registration: £0
• Limited company registration: £12 (online)

Other costs to consider

While optional, these can improve efficiency and reduce risk:

• Accounting or bookkeeping software
• Accountant support
• Business insurance
• Website and domain
• Trademarks
• Licences or certifications

Choosing and registering a business name

There is so much to consider choosing your name and it can be a fun part of starting out. Yet, as with many official processes, rules apply. Whilst you may want to delve into brand and product considerations, the important thing is to register the chosen name exactly right. No spelling errors, using appropriate words and avoiding a name already registered. 

Business name rules

• Sole traders can trade under their own name or a business name
• Limited companies must use a unique registered name
• Certain words require permission (e.g. “Bank”, “Royal”)
• Consider ‘sensitive’ words. Names must not be misleading or offensive

Checking name availability

Before committing, check:

• Companies House name availability
• Domain name availability
• Social media handles

Other than your Companies House name; domain and social media, names can be adapted, however keeping things consistent can avoid future rebranding costs and confusion.

Trading name vs registered name

This is a common area of uncertainty.

• Registered name: the official legal name (used on records and filings)
• Trading name: the name you use publicly with customers

You can trade under a different name as long as:

• You clearly disclose the registered name on invoices and websites
• You’re not misleading customers

This flexibility is useful for freelancers or businesses running multiple brands.

Should you trademark your business name?

Registering a business name does not automatically protect it and it could lead to costly battles if you have to challenge another business, or if it has not been trademarked.

What a Trademark does

• Protects your brand name, logo, or slogan
• Prevents others in your industry from using it
• Strengthens your legal position

How to Trademark a name

In the UK, trademarks are registered through the Intellectual Property Office.

For many micro businesses, trademarking isn’t urgent but it’s worth considering if your brand becomes central to your value. You could face future legal battles or challenges if someone opts for the same name or similar.

Common mistakes made by independent businesses

Most registration issues don’t come from carelessness; they come from rushing decisions or not knowing what matters yet. Being aware of the most common pitfalls can save time, money, and unnecessary stress.

Choosing the wrong business structure

Take time to understand the differences between a sole trader and a limited company before registering. For many early-stage or one-person businesses, starting as a sole trader offers flexibility and simplicity and you can always change structure later if your business grows or your needs change.

Mixing personal and business finances

Set up a dedicated business bank account as early as possible. Even when it’s not legally required, keeping finances separate improves organisation, saves time, and makes it easier to understand your business performance.

Choosing a business name already in use

Always check name availability before registering. Search company registers, domain availability, and online platforms to ensure your chosen name is distinct and usable.

Spelling errors in business names

Double-check spelling carefully and review naming rules before submitting your application. Make sure any restricted or sensitive terms are permitted or choose a simpler alternative that avoids delays.

Using an unsuitable registered address

Consider carefully which address you use when registering. If privacy is important, alternatives such as registered office services can provide a professional solution without exposing your home address.

Appointing an ineligible director

Before registering a limited company, ensure all directors meet eligibility requirements and understand their legal responsibilities. This avoids complications and protects the business from avoidable risk.

Paperwork, accounts, and ongoing responsibilities

Admin is rarely the reason people start a business, but it plays a vital role in keeping everything running smoothly behind the scenes. Clear records, timely filings, and the right financial setup don’t just help you stay compliant; they also save time, reduce stress, and make it easier to understand how your business is really performing.

Accounting and tax

Once your business is registered, you’ll need to ensure you’re up on tax reporting to help track performance throughout the year.

• Keep accurate records of income and expenses
• Understand tax deadlines
• File self-assessment or company accounts on time

Read more on tax deadlines.

Business bank accounts

Limited companies are legally required to have a separate business bank account, as the company is a distinct legal entity. While sole traders aren’t required to do this, having a dedicated business account is strongly recommended.

Keeping business and personal finances separate makes record-keeping far simpler, improves clarity, and can save significant time when it comes to tax returns or working with an accountant.

Business insurance

The type of insurance you need depends on the nature of your work, but it’s an important part of managing risk as your business grows.

Common types to consider include public liability insurance (to protect against claims from third parties), professional indemnity insurance (for advice or services provided), and employers’ liability insurance if you hire staff.

Summary

Every independent business is unique, but the foundations are the same. Registering your business correctly helps you stay compliant, avoid unnecessary costs, and focus on the work you care about.

Admin doesn’t need to be overwhelming. With the right setup from the start, it becomes a quiet system working in the background, supporting your independence, not restricting it.

For those concerned about the repercussions of errors there are business registration companies that, for a cost, will assist you with the process. For other unexpected costs, make sure you consider the right business insurance for your set up.

*Disclaimer – This blog has been created as general information and should not be taken as advice. Make sure you have the correct level of insurance for your requirements and always review policy documentation. Information is factually accurate at the time of publishing but may have become out of date.