How to Start a Company in the UK for Self-Sponsorship

Launching a company in the United Kingdom is a mandatory step for those looking to use the self-sponsorship route to secure a Skilled Worker visa. It is a requirement to be able to apply for a sponsor licence and skilled worker visa application. 

In this article, we will discuss the steps to start a business in the UK for the self-sponsorship process. Let’s get started. 

Steps to Register a Company in the UK

Establishing a company in the UK requires following a structured set of steps. Each step is crucial to creating a legitimate business that fulfils the conditions of the UK self-sponsorship visa. Here is an overview of the key steps:

1. Choose Business Structure

The first step is deciding on the most suitable business structure. This choice will influence your company’s operations, tax obligations, and legal liabilities. The main options include:

• Sole trader: You run the business individually, bearing full responsibility for profits and losses.
• Partnership: You share responsibilities and profits with one or more partners.
• Private limited company (Ltd): The most preferred choice for self-sponsorship. This structure creates a distinct legal entity, limits owner liability, and fulfils sponsor license requirements.

For self-sponsorship, registering as a private limited company is typically the best route as it aligns with UK immigration regulations and provides a solid foundation for sponsorship applications.

2. Pick a Company Name

Choosing an appropriate name for your company is a critical step, as it represents your brand and becomes part of your legal identity. Your company name will appear on official documents, including tax filings and invoices.

To comply with UK regulations, your chosen name must:

• Be distinctive and not too identical to existing business names.
• Avoid offensive, misleading, or restricted words unless you have specific approval.

The Company name availability checker by Gov.uk is useful for verifying your chosen name’s availability. If you are forming a private limited company, the name must end with “Limited” or “Ltd.” 

3. Obtain a Registered Address

A registered address is compulsory for establishing your business. This address is the designated location for receiving official communications from government bodies such as Companies House and HM Revenue & Customs (HMRC).

It must be located in the UK within the jurisdiction where your company is registered (England, Scotland, Wales, or Northern Ireland). 

If it is hard for you to manage an official physical address you can opt for third-party registered office services. These providers offer professional addresses for official use, ensuring privacy while maintaining compliance with legal requirements. This is particularly beneficial for entrepreneurs outside the UK.

Read also: Securing a Sponsor Licence: The First Step to Self-Sponsorship

4. Define the Share Structure

Shares represent ownership stakes in the company, and their distribution determines decision-making power, profit entitlements, and financial responsibilities. Setting up an appropriate share structure is a crucial step.

• A single-shareholder model, where one individual owns 100% of the shares, is a common choice for sole entrepreneurs pursuing self-sponsorship.
• For businesses with multiple shareholders, shares can be distributed based on agreed contributions or investments.

The number and type of shares should align with the company’s goals and long-term strategy, as they influence governance and profit-sharing mechanisms.

5. Prepare Key Documents

Two essential documents are required to formalise your company’s registration:

• Memorandum of Association (MOA): Automatically generated during online registration, this document establishes the agreement between initial shareholders and directors to create the company.
• Articles of Association (AOA): This outlines the internal rules for managing the company, including directors’ roles and shareholders’ rights. You can either draft a custom AOA or use standard templates available online.

Both documents must comply with legal standards and reflect your company’s intended operations.

6. Select a SIC Code

A Standard Industrial Classification (SIC) code is required to describe your business activities during registration. This code categorises your company for regulatory and statistical purposes.

Examples of SIC codes for tech companies include:

• 62020: IT consultancy.
• 62012: Software development.
• 62030: Computer facilities management.

Choose up to four codes if your business spans multiple industries. Ensuring accuracy in your SIC code selection is essential to maintaining compliance.

7. Register Your Company

The final step is enlisting your business with Companies House, the UK’s official registrar. This process can typically be completed online. Once registered, you will obtain a certificate of incorporation, which serves as proof of your company’s existence and includes essential details like its registration number and incorporation date.

To complete the registration, you’ll need to provide specific details for each shareholder or guarantor, such as a place of birth, parents’ names, National Insurance number or passport details.

The standard registration fee is £50, and the procedure is generally completed within 24 hours. Faster options are available for an additional fee.

Also read our Self Sponsorship Eligibility Checklist

8. Open a UK Business Bank Account

A UK business bank account is a must if your business is registered as a private limited entity. This account facilitates the management of your company’s economic transactions. To open a business bank account, you’ll need the following:

• Valid identification for all directors and shareholders.
• Proof of the registered business address.
• The company’s registration number is from Companies House.

For non-resident directors, opening a UK bank account may require additional steps or consultation with the bank to meet their requirements.

Tips for Successfully Registering a UK Company for Self-Sponsorship

Here are some tips that will help you avoid potential issues and register your company smoothly: 

1. Research Thoroughly Before Starting: Familiarize yourself with the requirements and regulations involved in setting up a business in the UK. Review resources provided by Companies House and consult guides specific to your industry to avoid any surprises.
2. Ensure Your Business Plan is Comprehensive: A clear and detailed business plan can guide your company’s growth and support your visa application. Highlight your company’s purpose, target market, financial projections, and long-term goals.
3. Choose the Right Professional Advisors: Hiring a UK business immigration lawyer can save time and ensure your registration process is smooth. They can also help you handle compliance with UK laws and visa regulations.
4. Be Strategic with Your Share Structure: If applying for self-sponsorship, keep your shareholding simple to maintain control of your company. Complex share structures may complicate visa applications or decision-making later.
5. Double-Check Your SIC Codes: Selecting the correct SIC codes is crucial for accurately representing your business activities. Take the time to match your intended operations with the appropriate codes to avoid misclassification.
6. Prepare All Documentation in Advance: Collect and organize all required documents, such as identification, proof of address, and shareholder details, before beginning the registration process. Being prepared will expedite your application.
   

Need Help With the Self-Sonsorship Route?

Setting up a UK company and navigating the self-sponsorship process can be quite challenging for individuals based abroad or unfamiliar with UK regulations. Partnering with experienced professionals ensures compliance and improves the likelihood of success.

At Sponsor Licence Lawyers, our team of legal and immigration experts is here to assist you at every step of your journey. From setting up your company to handling sponsor license applications and Skilled Worker visa submissions, we provide end-to-end support.

Contact us today to make your self-sponsorship aspirations a reality.