How to set up a small business with Companies House

Setting up a small business with Companies House involves disclosing key information about your new business, like its name and ownership structure. It’s important to declare this information correctly and keep it up to date as you trade in the future. 

We’ll walk you through the process of setting up your small business on Companies House easily so you can get straight to making money. 

Find out: 

• What sort of businesses need to register on Companies House
• How to set up a small business on Companies House
• What financial records you need to keep
• How to save time as you begin trading

Starting a small business can be time-consuming and confusing. Read on to learn about how you can save time and stress with the Countingup app.

Companies House is a register for limited companies in the UK. If you’re unsure of what a limited company is and what they do, you can find out more in our article: Sole Trader or Limited Company: How to Set Up Your Business. We explain how each business type is required to operate and their pros and cons as you’re looking to set up a new business.

Registering a limited company requires you to provide details when you apply. For anyone involved in the business as an owner or shareholder, you’ll need to confirm three of the following:

• Town of birth
• Mother’s maiden name
• Father’s first name
• Telephone number
• National Insurance number
• Passport number

We’ll discuss the other steps in the next section, but you will need this information ready for each person if your business has multiple parties involved.

To register your limited company, you must follow the next steps:

Your business’s name will be visible on everything from your invoices to adverts, so choosing the right one is crucial. If you haven’t got an idea already, your business’s name should suit your brand and products.

Choosing a name with Companies House means following the guidelines. Names of companies must be unique and end in ‘Ltd.’ or ‘Limited’ and cannot include offensive or sensitive terms. 

But how can you find a name that fits these criteria? 

Your company’s name can’t be someone else’s. You can find out if the name you want is already being used with the Companies House checker and trademark portals. You may need some backups before you find the right one, and be quick when applying.

How to avoid ‘offensive’ terms is obvious; however, doing the same for ‘sensitive terms’ is less so. Companies House specifically seeks to prohibit usage of names that suggest relationships with governments (unless you have permission) or which use protected terms like ‘Accredited’. This is to protect various government branches or other industry professionals from reputational damage (accidental or otherwise). Check which words you’ll need permission to use and who to contact using this online tool.

Using the information specified earlier, you can disclose all the relevant parties to Companies House. Specifically, limited companies must choose a director and register any additional shareholders involved in the business. 

Limited companies must have a director who is responsible for the company’s daily operations and compliance with regulations. Any company director should be aware of the full responsibilities and requirements placed on them before they undertake the position. If you’re setting up a company with no other employees or shareholders, you can be the only director and shareholder of the company.

Some companies appoint a company secretary (either when they register with Companies House or at a later date). This person’s role is to help the director manage their responsibilities. When they’re appointed, company secretaries must also meet requirements before undertaking the role. Regardless of who performs the responsibilities, a company’s director is still legally responsible for any mistakes. 

As mentioned above, if you’re operating on your own, you can be the director and shareholder of a business. However, any additional shareholders must be disclosed as you expand.

As you’re registering, and if at any point it changes, you are required to declare information about your company’s shares and their values. Companies can have different types of shares with their investors. Therefore, it’s important to disclose what your company has arranged for any potential investors seeking to join.

Along with the information outlined above, companies are required to identify people with significant control (PSC) of the business. PSCs are shareholders who own or control the company either via owning 25% or more in total shares or voting shares. Companies can have more than one PSC as this threshold is relatively low. Find out more about identifying PSC within your company when registering here.

When registering your company, you need to have two key documents ready: your ‘memorandum of association’ and ‘articles of association’.

All shareholders must sign your company’s ‘memorandum of association’. This document indicates that all parties agree to form the company. When registering with Companies House online, your company’s memorandum of association is generated automatically from the shareholder information you disclose. 

Companies specify how they are run via their ‘articles of association’, specifying the important rules agreed upon by the director, secretary and shareholders. Templates are available online; however, you can choose to write your own. 

Registering as a company comes with additional administration requirements when compared to other businesses. Once you’ve registered with Companies House, you’re required to keep a well-documented accounting record while trading for up to six years.

These records include all revenue, expenses, assets, debts, and records of who the company buys and sells goods to and from. Some industry exceptions are made (for example, for those in the retail industry) as recording this level of trading detail can be difficult at high volumes. Find out more about the specific level of record-keeping your business is required to meet here.

Establishing a business has its challenges. Countingup can help.

Our business current account and accounting app makes it easy to keep on top of your financial records from day one. Enjoy automated invoicing, expense categorisation and live cash flow insights. Start your business on the right track. Find out how Countingup can help here.