One of the first questions that you may ask when you decide to set up a new business is how much that new company will cost to form. Registering a new company will be the first step that you take once you have determined the type of business that you want to open. This is the first legal step in any new company formation. No matter what type of business you start or what legal entity that new company takes on, you will need to register in some form in order to legally trade under that new business name. Fortunately, registering a company is quick, easy and relatively inexpensive in the UK.
If you are setting up your business as a sole trader or a general partnership, your costs are very minimal. In fact, the only legal requirement that you have for these two types of business formation is to register as self-employed with HMRC. This is a quick and free process that can be done online or via phone.
If you are forming a limited company, then you will also need to register your new company with Companies House. This is also a quick and simple process, although there are minimal fees for registration and the cost of those fees will depend on how you register your business.
Registering with Companies House costs around £12 if you submit the registration application online. You also have the option of registering via post, although this is a bit more expensive and it takes much longer to get your certificate of incorporation since you have to wait for the paperwork to be delivered to Companies House and then you have to wait for the approval to be mailed back to you. If you are not yet ready to begin trading, this is a good option. However, if you are ready to start trading instantly, registering online is a much better option since you can have your certificate of registration normally within 24 hours after submitting it online.
If you choose to work with a company formation agent, you may incur additional fees, although many believe these fees to be very fair. When you are registering your company, you are required to submit a memorandum and an articles of association, as well as information about your shareholders and directors. This information can be filled out by you or your company formation agent can help you with it. Many company formation agents will draft the memorandum and articles of association for you, which some business owners believe to be a much less stressful way of getting these documents completed. Company formation agents charge relatively low fees, depending on which agent you use, to draft paperwork and submit all of your required documents to Companies House for you.
However, you choose to register your new company, you will find that the fees are relatively low and the paperwork is minimal in most cases. Registration however, is required if you plan to form a limited company.