Does a Sole Trader Need to Register with Companies House?

No, sole traders don’t need to register with Companies House in the UK. But before we answer this question, you have to understand who is a “sole trader”.

Sole traders don't have to register with Companies House

What is a Sole Trader?

If you are self-employed and the sole owner of your business, you are considered a sole trader. Unlike a corporation, individual owners have no shareholders or directors, and unlike a partnership, no one else is liable for the obligations.

You have full control over the company, oversee its assets and enjoy all after-tax profits. It can be worth it, but it also carries risks. Independent traders have so-called unlimited liability, e.g. if the company goes bankrupt or is issued, they are personally liable to the creditors and must pay the compensation themselves.

Sole proprietorships are generally small businesses that provide services to individuals and families. They often have few or no employees and include photographers, plumbers, interior designers, makeup artists or hairdressers.

Sole Trader and Self-Employed

A sole trader is a self-employed person, but a self-employed person does not have to be a sole proprietor. It all depends on the structure of your company. You are a sole proprietor if you are self-employed and the sole owner of your business. If you are only self-employed within the framework of a partnership or manage a GmbH, you are not the sole owner. Most entrepreneurs operate as a limited liability company (sole proprietorship or Umbrella Company). Even though they work alone and hire no one, their business is not a sole proprietorship, but a corporation.

What is Companies House?

All limited liability companies are required to register with Companies House, which makes company information publicly available on their website. This means that companies must provide information about their shareholders and directors and a copy of their accounts.

Does this Include Sole Trader?

Individual business owners are not required to register with Companies House, only those who wish to operate as a limited company must register with CH. However, if you are starting a business, you must register with HMRC as a self-assessed business leader.

A limited Company

How Do I Register As a Limited Company?

If you change your mind and decide that you would rather operate as a limited liability company, you should apply to Companies House as soon as possible. You must register within three months of starting your business in order to trade legally. To register your company, you must register online or by mail. mail. Online it is faster and cheaper. It costs £12 and your company usually registers within 24 hours. Watch our video on how to set up a limited liability company if you already own a sole proprietorship.

If you do this by post, please complete form IN01. This method takes longer, usually 8-10 days, and will cost you £40. This should be in the form of a check issued to Companies House.

To speed up the process and register your company the same day, you must register with Companies House Mister at the latest and pay a fee of £100. You should mark your envelope in the top left corner as well as ‘one day service’.

After registration, you will receive a deed of incorporation confirming that your company legally exists. It also shows your company number and creation date, both of which are important when filing your tax returns, so keep them safe.