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In Business Operations Last updated: November 17, 2022
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When starting or registering a company, you need to know various things to tackle the legal aspect and seamlessly run your business.

First, getting to know about company formation should be the priority among all other things.

But, what is company formation? What are the advantages associated with it? And, what are the factors to consider when building a business?

Here, let us explore it all and some important information on how to start a business in the UK.

What is Company Formation?

Registering your business as a limited company is referred to as “company formation” in the UK. In other words, you can describe the incorporation process as company formation.

Across the globe, the meaning remains the same, but the term may or may not differ. For instance, it can also be referred to as company registration at some places.

Advantages of Forming a Company

At first, some consider it a legal hassle or a formality to recognize your business legally. However, with company formation, you get a variety of benefits that helps your business and you as an individual.

Some of the most common advantages include:

Minimizing Personal Liability

Without forming a company, every risk/debt/legal interaction can influence your personal assets.

However, your assets will remain protected after the company formation, regardless of what happens to your business.

Your business/company is treated as a separate legal entity, and any legal course of action will be followed as per the laws in your country.

While your personal liability will go away, it does not mean that you should attempt to get away with an illegal business; it will get you into trouble.

Trust and Reputation

With an unregistered company, not everyone can trust you especially, if you want to expand your business to a larger scale.

So, with the company formation in place, people can verify its presence and have some amount of assurance when dealing with you.

Financial Perks

Starting from reduced income tax to overall tax planning, you get a lot of flexibility and choices to plan and save money on top of your profits.

I am no finance professional, but you should consult a legal expert to clarify the exact tax benefits and other financial perks that come with it.

Investing Opportunities

When you register, you get various options to attract investment through new shareholders/investors. 

In addition to some of these benefits, you also get a few other extras to help grow your business and seamlessly run your company.

Factors to Consider When Establishing the Business

While all that sounds good, you need to think ahead and make sure you are ready for everything when you start a business to avoid unnecessary headaches.

Some of the pointers that you should keep in mind include:

Your Expertise

Do you have the necessary skills or knowledge to overlook the entire business plan for the near future?

It is not just about having an idea, but being able to monitor and manage it, at least to get started. Furthermore, with the know-how, it becomes difficult for an external force to fool you or lure you to do bad business.

So, you will have to make sure that you gain the necessary knowledge to run the business you aim to grow. You may look at some courses on essential business skills.

Costs to Initiate

Considering you know enough to start the business, you also need to know the cost it will take to kick-start your business.

You should be able to start the business with no resource shortage comfortably. If you start strong, you’re likely to have easy growth if all goes as planned.


Ensure that you have done your homework on any existing competition to your business and how it might affect you.

You will have to stand out from the competition to surpass them. Without having an idea about the competitors, it is tough for a business to survive.


As a business, you need to evaluate the need for your product and services in the market. 

Without knowing the potential of the demand, you may not be able to grow in the future with the same products/services.

You can use various mediums like emails, social media, and local surveys to get a better view of that.

While several other factors like the availability of a skilled workforce, location, and technology exist, the points mentioned above are the most important ones.

Eligibility to Open a Business in UK

Knowing your business potential and tackling the basics is not the only thing to form a company.

In the UK, you need to fulfill specific eligibility requirements before applying for company formation.

Note that you should always consult the eligibility criteria from a legal expert or a government official. We mention some minimum requirements for reference here:

  • The director(s) must be at least 16 years old.
  • There must be at least one director appointed for the company.
  • Carefully choose the company name, as that must not be identical to any existing business.
  • At least one share should be issued at the time of incorporation
  • You should have a registered office address in the UK.
  • Provide all the necessary information to the customer before they place an order with you.
  • Check if you need a license to operate your business, to avoid penalties. 

How to Register a Business in UK?

You can register your business directly through the Govt’s Companies House, the UK’s registrar of companies.

Just head to the official page of Companies House, and explore the details necessary to register the company.

However, if you do not have the time to explore all the details and want help to form the company, you can approach some paid services to help you with the process. Similarly, you also have platforms to help you register a company in the US.

Most of the services offer a similar offering and competitive prices. You can compare the pricing and services for limited company formation to decide for yourself.


1stformations is an established company offering several company formation services.

You can opt for easy digital registration or get all things sorted out, starting from VAT registration, registered business address to secretary service.

The pricing will depend on the type of company formation package you require. You can search for your company name to check whether it’s available or not on their website for convenience.

Rapid Formations

You get a similar ability to search for a name and several company formation packages available with slight differences in the pricing.

You can also find Rapid Formations offer a privacy plan to protect your home address from the public register. 

It also features the option for VAT and PAYE registrations, if required.

Company Formation MadeSimple

A part of Moneypenny, Company Formation MadeSimple is one of the oldest online services to help you register a company with 24/7 support available.

It also offers similar packages that let you opt for quick registration or get your business fully compliant in every aspect.

You can also get a filing confirmation to verify the whole process.

The Formations Company

The Formations Company is a fantastic option for users looking for an e-formation package and other essentials.

You get help with tax and accounting, along with comprehensive options for legal and financial protections.

Quality Company Formations

Quality Company Formations offers unique privacy plus package that not only protects your home address but helps you become a GDPR-compliant business.

Similar to the others, you also get 24/7 customer support for your queries.

Your Virtual Office London

Compared to the other options, you get a variety of services along with the company formation package.

With Capital Office, you do not get a search functionality to check for a business name. However, you may get help from their staff, considering the packages are a bit expensive.

You can pay to get a free meeting room, get a service address, and also get the ability to hire professional staff to work for you handling calls and more.

Of course, not everyone needs a lot of paid help from the start. But, you do have the option to prefer some convenience if you require it.

Mint Formations

Mint Formations may not be one of the most significant services. However, you do get competitive packages and free support across all of their plans.

They feature most of the popular business bank accounts, but there are limited options compared to some choices above.


OSOME is yet another company formation service that lets you schedule a call to discuss/ask for the requirements you need.

They focus on providing you with online convenience. All you have to do is send your documents digitally, and they will set up everything else without any paperwork from your end.

You can find packages that include company formation, banking offers, accounting support, and more.

Get Started with Company Formation 👩‍💼

Once you go through the minimum eligibility requirements, it is often a quick process to register your company.

Whether you would like to do it yourself through UK Companies House or third-party approved services, that is up to your requirements.

If you want to save time and do not want to get involved with a lot of paperwork, the paid services can help. In either case, you should always do your research.

  • Ankush Das
    A computer science graduate with a passion to explore and write about various technologies. When he’s not writing, it is usually his cats who keep him busy.
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