When you need to set up as a sole trader
A sole trader is a type of business. You can be a sole trader as your only job or at the same time as working for an employer.
You will need to set up as a sole trader if the following apply:
- you’re running your own business as an individual
- you work for yourself
This is different from owning a limited company or being in a partnership.
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Step 1: Check if setting up a limited company is right for you
How you set up your business depends on what sort of work you do. It can also affect the way you pay tax and get funding.
Check if you should set up as one of the following instead:
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Step 2: Choose a name
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Step 3: Choose directors and a company secretary
You must appoint a director but you do not have to appoint a company secretary.
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Step 4: Decide who the shareholders or guarantors are
You need at least one shareholder or guarantor, who can be a director.
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and Identify people with significant control (PSC) over your company
For example, anyone with voting rights or more than 25% of the shares.
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Step 5: Prepare documents agreeing how to run your company
You need to prepare a 'memorandum of association' and 'articles of association'.
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Step 6: Check what records you'll need to keep
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Step 7: Register your company
You'll need to register an official address and choose a SIC code - this identifies what your company does.
- Check the rules for company addresses
- Check what your SIC code is
- Register your company with Companies House
Most people can register for Corporation Tax at the same time as registering with Companies House.
If you cannot, register separately with HM Revenue and Customs (HMRC) after you’ve registered your company with Companies House.