- register your sole trader operation with HMRC - and in so doing your must also.....
- register your business name with HMRC
- use your personal name on any business documentation if you are a sole trader?
Becoming a sole traderA sole trader is the simplest form of legal entity for your business. You can go on to become something else later if you want to.
The characteristics of a sole trader are:
- you work for yourself i.e. you are a "self-employed sole trader"
- you run your own business
- you are personally liable for any losses you make (i.e. you could become bankrupt as you have no limited liability such as that enjoyed by a company)
In order to become a sole trader you need to:
- have a National Insurance number. In order to get a National Insurance Number you must have the right to work or study in the UK.
- register for self-assessment with HM Revenue and Customs (HMRC). That's because you are required by law to complete a self-assessment form if you are self-employed.
- trade under your own name or choose a business name
This page on the government website explains how to set up business as a sole trader in the UK
Naming your sole trader business
You need to register a name for your business no matter what legal structure you choose for your business.
You can use your own name or trade under a business name
As a sole trader, you are required to include your own name and business name (if you have one and use it) on
- any official paperwork e.g contracts
- bank accounts.
Choosing a Legal Name
There are rules for naming your business.
The HM Revenue and Customs (HMRC) website has a page which tells you how to go about choosing a name for your business.
As I've indicated in relation to website names (see It's all in the domain name), it makes a lot of sense to be known by your own name for business purposes.
In the future, if you change any of the following you are required to tell HMRC about the change - and what the new name or address is
- your name,
- business name or
- your personal or trading address.
If in future, your business becomes a company it can't use a name that's the same as another company's name.
Using a business nameIn the UK you are allowed to trade using a name that's different to your registered name. This is known as a ‘business name’.
However there are constraints. For example government regulations (The Company, Limited Liability Partnership and Business Names (Sensitive Words and Expressions) Regulations 2014) define the terms which you cannot use in your business name on pages 4, 5 and 6.
In addition, a business/trading name MUST NOT
- include ‘limited’, ‘Ltd’, ‘limited liability partnership, ‘LLP’, ‘public limited company’ or ‘plc’
- be the same as an existing trade mark (click the link to do a search)