Registering a new business with Companies House is a straightforward process that formally establishes your limited company in the UK. For sole traders, registration with HMRC is the main requirement, while limited companies must file incorporation documents directly with Companies House.
This guide walks through the practical steps, required information and common mistakes to avoid so you can set up correctly and focus on building your e-commerce venture or startup without unnecessary delays.
Choosing your business structure
Decide early whether to operate as a sole trader or register a limited company. Sole traders are simplest: you and the business are legally the same. This structure suits many side hustles or early e-commerce sellers testing the market. A limited company creates a separate legal entity, which can offer protection for personal assets and appear more professional to suppliers or investors.
Consider your plans for growth, liability and how you want to pay yourself. Many founders begin as sole traders then incorporate later when revenue increases or external funding is sought. The choice affects tax reporting, National Insurance and administrative burden. Check current GOV.UK guidance because rules and implications change.
Registering as a sole trader
To register as a sole trader you must notify HMRC that you are self-employed. This is usually done through the GOV.UK website by completing the online form. You will need your National Insurance number, details of your business activities, trading address and the date you started trading.
The process typically takes minutes if you have all information ready. You receive a Unique Taxpayer Reference (UTR) by post within a few weeks. Keep records of income and expenses from the start. Many first-time founders underestimate how important accurate records are for the self-assessment tax return. Register promptly after you begin receiving income to avoid late-notification penalties.
Common pitfall: assuming you only need to register once turnover reaches a certain level. In practice you should register as soon as you start trading even if income is low.
Preparing to register a limited company
Gather the required information before starting the Companies House registration. You need a company name that is not already in use and complies with naming rules. Check availability using the Companies House WebCheck service. Decide on the registered office address; this will be public and used for official correspondence.
Choose at least one director. Directors must be over 16 and not disqualified. You may also appoint a company secretary, though this is optional for private limited companies. Prepare a SIC code that best describes your main business activity; e-commerce sellers often use codes related to retail sale via mail order houses or online retail.
Think carefully about shareholders and share structure. Most new companies issue ordinary shares. You will need the total number of shares, their value and who holds them. All founders should agree these details before filing to avoid disputes later.
The limited company registration process
Use the Companies House online service to incorporate. You can register directly on the GOV.UK website or through an authorised company formation agent. The online route is usually quickest. You will complete the IN01 form electronically, providing:
- Company name and registered office address
- Director and shareholder details with address, date of birth and occupation
- Share capital information
- Memorandum and articles of association
- SIC codes
Upload identity documents if required for verification. Most straightforward applications are approved within 24 hours, though complex cases or those flagged for review can take longer. You receive a certificate of incorporation once approved; this confirms the company legally exists and includes the company number.
Required documents and post-registration steps
After incorporation you must set up statutory registers, including a register of directors, shareholders and people with significant control (PSC). The PSC register records anyone who owns more than 25% of shares or voting rights or otherwise exercises significant influence. This information is filed with Companies House and updated when changes occur.
Open a business bank account using your certificate of incorporation. Notify HMRC that the company exists so you can handle Corporation Tax, PAYE if you employ staff, and VAT if applicable. Timelines matter: you must file your first Confirmation Statement within 14 days of the anniversary of incorporation and accounts according to the filing deadlines.
Common pitfall: failing to distinguish between personal and company responsibilities. Directors have legal duties and must keep accurate records. Another frequent error is using an incorrect or incomplete registered office address, which can lead to missed communications from Companies House or HMRC.
Common pitfalls for first-time founders
First-time founders often choose an unsuitable company name that is too similar to an existing trademark or trading name. Always search both Companies House and the Intellectual Property Office databases. Another issue is providing inconsistent information across forms, which can delay approval.
Many underestimate ongoing compliance. A limited company requires annual accounts, Confirmation Statements and timely filing. Late filings incur penalties that increase over time. Sole traders sometimes forget to register for self-assessment by the deadline, leading to automatic penalties.
Plan your address and contact details carefully. Using a home address makes it public; some founders prefer a virtual office or serviced address. Finally, ensure all directors understand their responsibilities before filing. Incorrect appointments or missing consents create problems later when trying to open bank accounts or sign contracts.
Next steps after successful registration
With your business formally registered, focus on practical setup. Set up accounting software that suits your needs and start recording every transaction. Create a simple business plan that outlines your e-commerce or startup goals, target customers and how you will generate revenue. This helps when speaking with mentors or applying for grants.
Review insurance needs, particularly public liability or professional indemnity if relevant to your sector. Build good habits around record-keeping and compliance from day one. Many founders in West Yorkshire and across the UK benefit from local support networks that provide practical guidance without taking equity or charging fees. Loomworks, for example, offers selected early-stage founders free desks, a registered address and operator mentoring in Liversedge.
Remember that requirements, thresholds and processes can change. Always verify the latest information directly on GOV.UK, HMRC or Companies House websites before taking action.
Frequently asked questions
Do I need to register with Companies House if I am a sole trader?
No. Sole traders register with HMRC as self-employed rather than with Companies House. Only limited companies, LLPs and other incorporated entities register directly with Companies House. Sole traders may still need to file a self-assessment tax return each year.
How long does it take to register a limited company?
Most online applications are processed within 24 hours if all information is correct. More complex applications or those needing manual checks can take several days or longer. Submitting complete and accurate information reduces the chance of delays.
Can I use my home address as the registered office?
Yes, but it becomes publicly available on the Companies House register. Some founders prefer a different address for privacy or professionalism. The address must be a physical UK location where official documents can be delivered during business hours.
What is a SIC code and how do I choose one?
A SIC code describes your main business activity. Choose the code that most closely matches what you will do. E-commerce businesses often select codes in the 47xxx or 47910 range. You can add more codes later if your activities change.
What happens if I file documents late with Companies House?
Late filing of accounts or Confirmation Statements results in penalties. These increase the longer the documents are overdue and, in serious cases, can lead to directors being disqualified. Set calendar reminders for all filing deadlines from the start.
Related reading: Best business bank accounts for UK startups 2024, Essential UK tax rules for new business owners, When and how to turn your side hustle into full-time UK business. Browse all starting a business guides or apply to Loomworks.