# How to set up your first-ever business (without the stress) Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-02-15 Category: BUSINESS Category URL: https://financedigest.com/category/business Meta Title: Ready to Start Your Own Business in 2020? Here's How to Meta Description: Discover how the challenges of 2020 have inspired many to become entrepreneurs. Learn how to register your business as a sole trader, limited company, or URL: https://financedigest.com/how-to-set-up-your-first-ever-business-without-the-stresshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/untitled-design-17-1736838577849-compressed.jpg) Let’s face it: saying that 2020 has been a disruptive year is, if anything, an understatement. But for some, that shift has actually been the kick in the rear that they’ve been waiting for to do something new. If you’re something of a go-getter yourself, now could be the moment you’ve been waiting for. You’re [ready to step out into the world](https://www.financedigest.com/australian-mayor-readies-worlds-first-defamation-lawsuit-over-chatgpt-content.html "Australian mayor readies world’s first defamation lawsuit over ChatGPT content") and make your own way. You’re ready to be your own boss. Except… how does that work, exactly? “We’ve seen plenty of people start with a business idea who feel caught out at the first hurdle,” says Andrew Cooke, Strategic Director at co-working and workspace provider [Bruntwood Works](https://bruntwood.co.uk/about-bruntwood/works/). “But while the initial anxiety about the admin and legal stuff might put some off, the benefits of establishing your own [business quickly](https://www.financedigest.com/crowd-sourced-feedback-tools-to-help-businesses-make-better-decisions-quickly.html "Crowd-Sourced Feedback Tools to Help Businesses Make Better Decisions Quickly") outweigh all of that. “The good news is that it’s never been easier to [set up a company](https://www.financedigest.com/london-set-for-hosepipe-ban-from-aug-24-water-company.html "London set for hosepipe ban from Aug. 24 – water company") than it is today. We’re [seeing countless businesses get off the ground in our co-working spaces](https://www.financedigest.com/bae-systems-sees-big-opportunity-in-space-after-uk-satellite-bolt-on.html "BAE Systems sees big opportunity in space after UK satellite bolt-on"). It’s exciting to see how the difficulties of 2020 have actually awoken the inner entrepreneur of so many, and to have played a part in their initial success.” So, if you’re [ready to launch](https://www.financedigest.com/the-spritz-gets-a-shake-up-something-nothing-launches-new-ready-to-drink-spritz-in-time-for-summer.html "The Spritz gets a shake up! Something & Nothing launches new ready-to-drink Spritz in time for summer") your dream business — where do you start? ## **Register your business** The first step is to go to the UK [Government website to register your business](https://www.financedigest.com/where-do-small-businesses-turn-when-government-support-dries-up.html "Where do small businesses turn when government support dries up?"). You have a couple of options: - **Register as a sole trader**— The simplest [way to set up a business](https://www.financedigest.com/five-ways-businesses-can-prepare-themselves-for-the-digital-economy-be-kaler-pilgrim.html "Five ways businesses can prepare themselves for the digital economy – Be Kaler Pilgrim"). The only catch here is that you’ll be [personally responsible for your business’s](https://www.financedigest.com/should-you-take-out-a-personal-loan-to-start-or-grow-your-business.html "Should You Take Out a Personal Loan to Start or Grow Your Business?") debts, as well as for the accounting. Be mindful that if you get into a lot of debt as a sole trader, you’ll have to pay it off even if you shut down your business. To set up as a sole trader, [you have to tell HMRC that you pay tax through self-assessment](https://www.gov.uk/log-in-file-self-assessment-tax-return/register-if-youre-self-employed), so you’ll need to file your own taxes each year. - **Start a limited company** — Limited companies are a little bit harder to set up than sole traders. However, they come with one major benefit: you can [keep your personal finances](https://www.financedigest.com/sas-bridge-financing-keeps-survival-hopes-airborne-shares-climb.html "SAS bridge financing keeps survival hopes airborne, shares climb") separate. That means you won’t be personally liable to pay debts the business accrues. There are a few more management and reporting responsibilities, so you may want to get in touch with an accountant to help you [set up a limited company](https://www.gov.uk/set-up-limited-company). - **Partnerships**— The easiest [way for two or more people to run a business](https://www.financedigest.com/simple-ways-to-reduce-business-costs.html "Simple Ways to Reduce Business Costs") together. Like a sole trader, you’ll have accounting responsibilities, but with a [partnership](https://www.gov.uk/set-up-business-partnership), you share responsibilities for debts with your business partner. ### **Freelance or self-employed?** One of the many questions you might ask yourself at first is whether you want to go freelance or set up a business — and what’s the difference, anyway? While freelancers and business owners are both responsible for registering their business (freelancers should register as sole traders) and for their tax returns, they are perceived differently by potential clients. Freelancers are known for working on multiple short-term projects, so clients tend not to make long-term commitments with them. If you have ambitions to grow your company, you’re better [marketing yourself as a business](https://www.financedigest.com/global-sulfate-free-body-wash-market-business-opportunities-current-trends-growth-market-forecast-global-industry-analysis-by-2029.html "Global Sulfate Free Body Wash Market: Business Opportunities, Current Trends, Growth, Market Forecast & Global Industry Analysis By 2029") rather than a freelancer. ## **Choosing a name** Generally speaking, you can call your company whatever you like, as long as: - It isn’t offensive - It ends in ‘Limited’ or ‘Ltd’ (for limited companies) - It isn’t the same as another business’s name You can [check to see whether your chosen name is available](https://find-and-update.company-information.service.gov.uk/company-name-availability?_ga=2.205331152.1192513720.1602685553-1022310841.1581526845) on the government’s website. ## **The cost of registering** While you might [need a pot of money to help your business](https://www.financedigest.com/do-small-businesses-need-branding.html "Do small businesses need branding?") grow in the first few months, you’ll only need to pay £12 to register your business. You can pay by [credit or debit card](https://www.financedigest.com/more-businesses-investing-in-assets-like-virtual-credit-cards.html "More Businesses Investing In Assets Like Virtual Credit Cards"). Simple! ### **1\. Check the rules** Different industries have different rules for what you can and can’t do or sell. Make sure you do your research so you know you aren’t breaking the law. Here are a couple of examples where you’ll need to [follow industry-specific rules:](https://www.financedigest.com/seven-golden-rules-to-follow-when-implementing-kyc-process.html "Seven golden rules to follow when implementing KYC process") - Setting up a bar? You’re going to need an alcohol license. - Selling [products online](https://www.financedigest.com/four-innovative-ways-to-pay-for-products-online.html "Four Innovative Ways to Pay for Products Online")? You need to [provide customers with key information](https://www.gov.uk/online-and-distance-selling-for-businesses) first. - [Playing music](https://www.financedigest.com/dont-play-second-fiddle-how-disruptor-banks-can-leverage-music-and-audio.html "Don’t Play Second Fiddle: How Disruptor Banks Can Leverage Music and Audio")? There are specific licenses you need for both recorded and live music. Not sure what licences you’ll need? The government has a [licence finder](https://www.gov.uk/licence-finder) you can use to make sure you’re fully covered. ### **2\. Get insured** Insurance is a big deal for businesses — and, like [car insurance](https://www.financedigest.com/10-things-you-could-be-doing-that-invalidate-your-car-insurance.html "10 things you could be doing that invalidate your car insurance"), some of it is actually mandatory. You’re legally required to have the following [types of insurance:](https://www.financedigest.com/types-of-insurance-for-yourself-and-your-family.html "Types Of Insurance For Yourself And Your Family") - **Employer** [liability insurance — Covers the cost of compensating employees who suffer injury or illness due to their work. The only time you don’t need this is if you don’t have any employees. - **Commercial [motor](https://www.financedigest.com/the-road-to-digital-disruption-in-motor-insurance.html "The road to digital disruption in Motor Insurance") insurance** — Like car insurance for businesses. You [need this if your business](https://www.financedigest.com/uk-needs-to-make-politically-unpopular-reforms-to-boost-growth-business-group-says.html "UK needs to make politically unpopular reforms to boost growth, business group says") uses vehicles. - **Professional indemnity insurance** — Covers the [cost of compensating clients for any loss or damage they suffer because of negligent services your business](https://www.financedigest.com/esg-prepared-why-ignoring-esg-is-a-costly-business.html "ESG Prepared: Why Ignoring ESG is a Costly Business") has provided. This is a legal requirement for [regulated professions](https://www.abi.org.uk/products-and-issues/choosing-the-right-insurance/business-insurance/liability-insurance/professional-indemnity-insurance/) like solicitors, accountants and financial advisors. ### **The time is now** Andrew Cooke, Strategic Director at Bruntwood Works is hopeful about the new generation of entrepreneurs. “2020 made us appreciate how satisfying it is to control our own destinies. It’s [provided breathing room](https://www.financedigest.com/comparative-analysis-of-the-best-data-room-providers.html "Comparative Analysis of the Best Data Room Providers") for people to think about what they actually want from their future; for many, it’s to launch their own business. “It’s been especially satisfying for us to provide COVID-safe spaces for people to do that. Now, we’re witnessing those start-ups blossom.” --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---