How to set up your business

You should choose a business name. As a sole trader, you do not have to register a business name but you need to publicise a fixed point of contact so that people connect the business name with you in your capacity as a sole trader (eg a statement on your business stationery: 'Mary Brown trading as 'Heaven Scent Cosmetics', 123 High Street ...etc').

As soon as you can after starting your business, you must register for self-assessment with HMRC.

For more information on your responsibilities as a sole trader, read Running your business.

You should choose a name for the partnership. For more information, read How to choose a name for your business. As a partnership, you do not have to register a business name but you need to publicise a fixed point of contact so that people connect the business name with you in your capacity as a business partnership (eg a statement on your business stationery: 'John Smith and partners, 234 High Street ...etc').

You must choose a 'nominated partner' who is responsible for administration and tax returns.

The nominated partner must register the partnership for self-assessment with HMRC  via the Government Gateway. The other partners must register for self-assessment with HMRC. If you register later than 5 October in the second year of your business, you could be charged with a penalty.

To be clear about your relationship with your partners, you can consider drawing up a Partnership agreement. Read Setting up a partnership for more information.

For more information on the different types of partnership, read Types of partnership. For more information on your responsibilities when running a business partnership, read Running your business.

You should choose a company name, for more information on this, read How to choose a name for your business. You must register the company with Companies House. You can do this online, by post or using an agent, for more information see here. The registration fee payable will depend on the service you choose.

Within 3 months of trading, your company needs to be registered for corporation tax. For most businesses, this is done at the same time as registering with Companies House, failure to do so may result in a penalty - for further information, read the government guidance.

For more information on registering a company, read How to register a company in 5 steps. To find out more about your responsibilities when running a company read Running your business.

Limited Liability Partnership (LLP)

Choose a name for the LLP.

You must register the LLP at Companies House – for more information see here.

It's also worth considering putting in place an LLP Agreement.

Read Setting up a partnership for more information on setting up an LLP. For more information on your responsibilities when running an LLP, read Running your business.

Scottish Limited Partnership (SLP)

Choose a name for the SLP.

You must register the SLP at Companies House - for more information see here.

Read Setting up a partnership for more information on setting up an SLP. For more information on your responsibilities when running an SLP, read Running your business.

This is all about considering the pros and cons. You should think about the following: 

• if personal finances should be separate from the business

• time spent on setting up a company, LLP or SLP and the additional administration involved

• financial information about the business being public in the case of a limited company, LLP or SLP

• how the public perceives entities that are registered and regulated by Companies House (eg companies, LLPs and SLPs)

When deciding on the best route, you should also consider tax efficiency issues. The amount of tax paid and eligibility for certain tax reliefs and grants will depend on your choices.

An accountant or tax advisor can help out and lead to savings over the long term.