Thinking of opening your own company? Here are important things to know

Opening a company is one of the most exciting and fulfilling things you can do in your life. A company is a separate legal entity, which means it has its rights and obligations. There are many reasons why people open their own company, either for the security of having a steady income or because they want to pursue their passion. Whatever your reasons might be, you need to know all there is about opening your very own company so that you can get an idea of what it truly means to be an entrepreneur.

Hence, when starting a company, you will need to decide on its name and structure. You will also need to choose a business model and register your company with the relevant authorities. There are many things to consider when starting a company, so it’s essential to do your research and plan.

Here are some essential things you need to know:

1. Select a business model

There are many different business models that one can choose from depending on what they want their business to do or cater for. If you’re going to establish a private limited company, you will need to select a specific business model as such companies can only operate under certain models. For instance, if you own a publishing company and want to take your company public, then the best business model for you would be an investment limited by shares (also referred to as investment corporations). Some other popular options include:

• Sole Traders – This is where someone goes into business by themselves without forming a or incorporating any legal entity at all.
• Partnership – This is where two or more individuals come together to launch a business without incorporating any legal entity at all.
• Limited Liability Partnership (LLP) – As the name suggests, this is an association of people not covered by limited liability that would usually be available to shareholders in private companies or even directors of limited companies.
• Private Limited Company (Ltd) – This is the most popular business structure, and it is similar to a public limited company but with fewer shareholders. The key benefits of forming an Ltd company are: Limited liability for its members Taxed as a separate legal entity Easier to raise capital Easier to administer than a partnership or sole trader
• Public Limited Company (PLC) – A PLC is very similar to an Ltd company, with the main difference being that it can have an unlimited number of shareholders.

2. Register your company

When starting a company, the first thing you must do is register it. There are many benefits of registering your company, and these include:

• Setting up the legal framework – The legal framework of a business includes its constitution and other rules and regulations that govern its behavior (limits powers, manages shareholdings, etc.). This framework will be set up at incorporation, and this involves filing certain documents with the relevant authorities depending on the type of structure you choose for your business. For instance, if you decide to form an LLP or private limited company, such systems require formation through registration instead of incorporation, as sole trade ships or partnerships.
• Securing business credit – As soon as you register your company, it is assigned a unique identifier, which you can use to open bank accounts and also apply for credit.
• Raising capital – As soon as your company is registered, people will be more willing to invest in it.
• Boosting reputation – You will become more reputable when you register your company because people will know that someone somewhere has vetted you enough to give the go-ahead.

3. Name your business

When starting a company, you will need to decide on its name. This can be done by registering your company with the Companies House. When selecting a name for your business, you will need to consider some critical factors, including:

• Is it unique?
• Is it memorable?
• Does it impact my brand identity?
• Will it be easily searchable on the internet? 
• Can I trademark it or protect its usage with copyright?
• The name should not be confused or mistaken with other businesses in the UK, EU, or outside it.

4. Consider the structure of your business

Before deciding how your business will function, you need to carefully think about its structure and ensure that it is best suited for your needs. This includes choosing between legal entities such as sole trader, partnership, LLP, etc. It also involves figuring out what works best for your business regarding its ownership structure, i.e., who will own and run the business.

5. Marketing your business

No company can be successful without marketing, and this is especially true for startups and small businesses. There are many ways that you can market your business, and some of the most popular methods include:

• Online marketing – It can include everything from a company website and social media profiles to search engine optimization and email marketing campaigns.
• Traditional marketing – This can include advertising in newspapers, magazines, on TV or radio, through PR firms, etc.
• Networking – Meeting people in your industry or related industries and exchanging business cards/contact details is a great way to find new customers, suppliers, and partners.

6. Choose your business location

One of the most important decisions you will make when starting a company is deciding where to set up shop. This decision will be based on many factors, including:

• The type of business you are setting up
• The size of your business
• The location of your customers and suppliers
• The cost of your premises
• Whether you need to be located in an industrial estate or hub like Science Park or near a train station.

So, there you have it – essential things that you need to know before starting your own company. By taking the time to do your research and planning ahead, you will make the process of starting your own business much smoother and less daunting. Note that this is just a basic overview, and there are many other things you will need to consider when starting your own company.

 

06/12/2021