How To Register a UK Business in 2026: Everything You Need To Know

How To Register a UK Business in 2026: Everything You Need To Know.

Starting a business in the UK is an exciting venture, but there are important steps to take to make it official. Registering your business is a crucial move to ensure you’re operating legally and to give you access to business banking, tax benefits, and credibility with customers. 

This guide breaks down everything you need to know about registering a business in the UK in 2026, from choosing the right business structure to completing the necessary paperwork for each type of business.

Choosing the right business structure.

Before you register, you’ll need to decide on a business structure. The structure you choose affects how you’ll register your business, the taxes you pay, and your personal liability. In the UK, the main types of business structures for small businesses are:

• Sole trader: A simple structure where one individual owns and runs the business. You keep all the profits but are personally liable for any debts.

• Partnership: Two or more people share ownership and responsibilities. Profits (and losses) are split between partners, and each partner is personally liable for the business’s debts (unless you set up a type of partnership that limits liability).

• Limited company: A separate legal entity from its owners (shareholders). For a private limited company (Ltd), the owners have limited liability for debts. This structure requires formal incorporation with Companies House.

• Limited liability partnership (LLP): A partnership where all partners have limited liability. An LLP must be registered with Companies House, similar to a company. This is less common for small businesses, but useful if you want liability protection in a partnership structure.

Each structure has its pros and cons. For example, sole traders have less paperwork and full control, while limited companies offer liability protection and potentially more credibility. There’s also a cost difference: registering as a sole trader or partnership is free, whereas forming a limited company or LLP requires a registration fee to Companies House (currently £50 for standard online incorporation).  

How to register as a sole trader.

Being a sole trader is the simplest way to start a business in the UK. Technically, there’s no need to register with Companies House or create a formal legal entity. You simply operate under your own name (or a chosen business name) and personally own the business. However, you do need to inform HM Revenue and Customs (HMRC) that you’re trading so you can pay the correct taxes.

To register as a sole trader:

• Register with HMRC as self-employed: You do this by registering for Self Assessment (the system for reporting your income tax when you’re self-employed) online through the government’s website. It’s best to do this as soon as you start trading to avoid any late registration penalties. Once registered, HMRC will set you up with a Unique Taxpayer Reference (UTR) and expect you to file an annual tax return.

If your total self-employed income is £1,000 or less in a tax year, you don’t usually need to register or file a return because of the trading allowance. Once your income goes over that level, you should register as self-employed and file a return, even if your allowable expenses would otherwise reduce your profit below £1,000.

• Choose a business name (optional): You can simply trade under your own personal name, or come up with a separate business name. There’s no formal registry for sole trader business names, but make sure your chosen name isn’t already in use by another business or trademarked by someone else. Also avoid using terms like “Limited” or “Ltd” in your name, since those are reserved for incorporated companies. If you want exclusive rights to a brand name, you could register it as a trademark, but this isn’t required just to operate as a sole trader.

• Know your obligations: As a sole trader, you keep all your business’s profits after tax, but you’re also personally responsible for any debts or losses. You’ll need to keep records of your business income and expenses throughout the year. Each year, you must file a Self Assessment tax return and pay income tax on your profits, plus make National Insurance contributions (NICs) as required for self-employed people. If your annual turnover exceeds the VAT threshold (£90,000 in 2025), you’ll have to register for VAT and charge VAT to your customers. Below that threshold, registering for VAT is optional (some businesses do it voluntarily to reclaim VAT on expenses). You’ll also need to pay business rates to your local council if you operate from business premises.

• Set up your finances properly: While it’s not a legal requirement for sole traders to have a separate business bank account, it’s highly recommended. Separating your business finances from your personal finances makes bookkeeping easier and helps demonstrate professionalism. 

How to register a partnership.

A business partnership is similar to a sole trader but with two or more people sharing ownership. There are two main forms: a general partnership and a limited liability partnership (LLP). In a general partnership, all partners are personally liable for the business's debts. In an LLP, partners enjoy limited liability protection, but it must be formally registered like a company with additional filing requirements.

For a general partnership:

• Form the partnership and choose a nominated partner: You and your partner(s) should agree on how you'll run the business and share profits. It's highly recommended to draw up a partnership agreement (though not legally required) to prevent disputes by clarifying each partner's roles and share of profits/losses. Among the partners, decide who will be the 'nominated partner' – this person manages the partnership's tax affairs with HMRC and submits the partnership's tax return.

• Choose a business name: Partnerships can use the partners' surnames (e.g. Smith & Jones) or create a distinct business name. There's no formal registration for general partnership names, but ensure the name isn't already used by another business and isn't misleading. Do not include "Limited" or "Ltd" in the name since your partnership isn't a limited company. 

• Register the partnership with HMRC: The partnership entity needs to be registered for Self Assessment. The nominated partner can do this online by submitting form SA400. This registration generates a UTR (Unique Taxpayer Reference) for the partnership and requires filing annual Partnership Tax Returns to HMRC.

• Register each partner with HMRC: Each individual partner must also register as self-employed with HMRC (if not already) and submit their own Self Assessment tax returns annually. This is done using form SA401, which gives each partner their own UTR number. HMRC expects two sets of filings: one for the partnership (overall profits/losses) and one for each partner (personal share of profits).

In a general partnership, all partners share responsibility for the business’s debts, which means creditors can go after personal assets if things go wrong. Each partner pays Income Tax and NICs on their share of profits. 

For a Limited Liability Partnership (LLP): If you want partnership benefits with legal protection, form an LLP by registering with Companies House. You need at least two designated members and can complete the process online. This involves choosing a unique LLP name, providing a UK registered office address, and submitting incorporation details for all partners. The registration fee is £50 for online processing as of 2025. Once registered, LLPs operate similarly to general partnerships for tax purposes, with each member paying tax on their profit share via Self Assessment. However, LLPs must file annual accounts and confirmation statements with Companies House, making the business's financial information public record.

How to register a limited company.

A limited company is a distinct legal entity separate from its owners. The company can own assets, incur debts, and enter contracts in its own name. Owners (shareholders) have limited liability – they're only financially responsible up to their investment amount, protecting personal assets from business creditors. Many UK small businesses choose incorporation for this liability protection and potential tax advantages, despite additional administration. Here’s how to register a limited company in the UK:

• Choose a company name: Pick a unique name that isn't already taken by another company. The name must end in "Limited" or "Ltd" and must not be too similar to existing company names on the Companies House register. Certain words require special permission (like "Bank" or "Royal") and offensive names aren't allowed. Search the Companies House online database to check availability and have backup choices ready.

• Decide on directors and shareholders: A limited company needs at least one director (who runs the company day-to-day and handles legal responsibilities) and one shareholder (owner). You can be both the sole director and shareholder, which is common for one-person businesses. For each director, provide full name, date of birth, occupation, and a service address (appearing on public record – many use office or accountant addresses for privacy, though you must also give Companies House a confidential residential address). For shareholders, provide name, address, and number of shares they'll hold. If you're the only shareholder, you might start with just 1 share or any number you choose.

• Prepare necessary details and documents: You'll need a registered office address (a UK physical address that will be publicly listed where official correspondence is sent – could be your home, business premises, or service address). Choose the company's SIC code (standard industry classification describing your main business activities – search online lists to find the best match). For incorporation, you can use the standard "model" articles of association that Companies House provides (these are default company rules suitable for most small businesses). The online system automatically generates the memorandum of association.

• Submit your incorporation: Register online via Companies House web incorporation service for £50 (standard processing, typically same day or within 24 hours). For faster processing, a same-day service costs £78. The online form requests company name, registered office, director/shareholder information, and other details.

• New ID verification requirements: As part of anti-fraud measures rolling out in 2025, company directors may need to verify their identity with Companies House during registration. This could involve providing ID or using digital verification services – be prepared for this additional step.

• Receive your Certificate of Incorporation: Once approved, you'll receive this official document confirming your company's name, number, and formation date. Online applications typically provide this as an email PDF. This certificate is like your company's "birth certificate", proving it exists as a legal entity.

After registering your limited company:

• Register for Corporation Tax: Tell HMRC your company is active for tax purposes, typically within 3 months of starting business activity. This is often done during the incorporation process, or you must notify HMRC separately.

• Open a business bank account: Limited companies must have separate business accounts by law. 

• Understand ongoing obligations. For example: – File annual accounts with Companies House– File annual confirmation statements updating company details– Submit Company Tax Returns to HMRC and pay Corporation Tax on profit 

• Consider VAT and PAYE: If turnover exceeds £90,000, register for VAT to charge VAT on sales and file quarterly returns. Some companies register voluntarily below this threshold. If employing staff or paying director salaries, set up a PAYE scheme with HMRC for income tax and National Insurance.

Many businesses start as sole traders and later incorporate when it makes sense for tax or liability reasons. As a limited company, you benefit from formal structure and professional image, but stay diligent with paperwork and compliance requirements.

After registration: next steps and tips.

Registering your business is a major milestone, but there are several additional steps you can take to help establish a solid foundation:

• Implement proper bookkeeping: Put a system in place to track income and expenses from day one. This could be a simple spreadsheet, accounting software, or hiring an accountant. Good record-keeping helps you manage cash flow, claim eligible expenses, and makes things much easier at tax time.

• Plan for taxes: Be proactive about tax obligations. Sole traders and partners should set aside money for Income Tax and NICs (typically due twice yearly in January and July through HMRC's payments on account system). Companies need to save for Corporation Tax payments. 

• Get required licences or permits: Depending on your industry, you may need additional permissions to operate legally. Examples include food safety certificates for cafes and restaurants, trade licences for certain construction businesses, or market trader licences from local councils for craft sellers. 

• Secure appropriate business insurance: Insurance is crucial for managing risk. Consider public liability insurance if customers interact with your business in person, professional indemnity insurance for service providers, and employers' liability insurance if hiring staff (usually legally required). Insurance provides financial protection if something goes wrong.

• Build business credibility: Use your official registration to build trust. Create business profiles with credit reference agencies to establish credit history. Enter contracts in the business name rather than personally. Demonstrate credibility by displaying your company number or registration details on your website and stationery.

• Consider business support: Being registered opens doors to government programs, grants, and reliefs available to startups and SMEs. It’s worth checking what support programs are available in your area.