Setting up a business is exciting, but there’s work to do. In this guide, we cover the first steps to get you started out right.
You’ll be eager to get out there and start selling. You might already be doing a bit of business. We get it but hold your horses. You need to form your company before taking it any further. This is necessary to trade legally.
Company formation can be done in a variety of ways. The traditional route is straight through Companies House, but the process is arduous.
MachFast is a better way to go about it. With our app, you can form a limited company in 10 minutes or less and open up a business current account at the same time. You can even search for a business name. And it’s free. How good is that?
At MachFast we focus on limited companies, but you have other options.
You’ll be personally responsible for business debts and accounting responsibilities. There will be one director, you. Read more.
A limited company is its own legal entity. Shareholder liability is limited. The business pays corporation tax. Read more.
A partnership is a business with more than one owner. The owners share responsibility for the business and are liable for debts. Read more.
Once you have incorporated, you can go about doing businessy stuff like setting up a business current account (you get a free CashPlus account for one year with MachFast) and invoicing people in your business name.
Rules for trading
Depending on the type of business you set up, there will be rules for trading.
Check if you need:
- Licenses, permits or certifications (for example, if you are a gas engineer, you will need to be Gas Safe certified)
- Insurance (public, product, and professional liability insurance)
- To apply to a regulatory body, such as the Financial Conduct Authority (FCA) in the case of financial services.
There are also rules you need to follow if you:
- Sell goods online
- Sell hazardous materials
- Import goods
- Export goods
- Store or use personal information (GDPR, Data Protection Act 2018).
Where you work
You will have responsibilities whether you run your business from home or run it from elsewhere. You may have to pay business rates if you rent or buy a property. Business rates are charged on shops, offices, pubs, warehouses, factories, and indeed any commercial property. You may also be charged if you work from home, although the rules are cloudy on this and each case is considered on merit.
Taking on people
If you want to employ people there are seven steps you need to take, as detailed here on the Gov website. Becoming an employer is a big responsibility but a rewarding one. Often, it is necessary for a business to function at all.
You will need to:
- Run payroll
- Pay for employee National Insurance
- Provide a workplace pension to eligible staff
- Give employees a contract of employment
- Train your staff in health and safety procedures.
Before you take anyone on, you need to register as an employer with HM Revenue and Customs. You can find out more about that here.