How to Form a Consultation Company

Starting a consulting business in the UK can be a lucrative opportunity, given the country’s robust economy and business-friendly regulations. Here’s how you create a company for your business, which is often the preferred structure for its liability protections and tax benefits.

1: Define Your Consulting Niche

The first step in forming a consulting company is identifying your area of expertise. Common consulting sectors include:

Management and Strategy Consulting: Advising companies on operational improvements, mergers, acquisitions and long-term strategy.
IT and Technology Consulting: Offering expertise in software implementation, cybersecurity, digital transformation and IT infrastructure.
Human Resources (HR) Consulting: Helping businesses with recruitment, employee management, and organisational structure.
Financial Consulting: Providing insights on financial planning, tax, compliance and budgeting.
Marketing and Sales Consulting: Assisting companies in brand building, marketing strategy and sales growth.

Identifying your niche helps you tailor your services and develop a focused business plan.

2: Choose Your Company Name

Different: Ensure your chosen name isn’t already in use by another company or trademark. Look for your choice with the name checking tools throughout our website.
The End: ‘Limited’ or ‘Ltd’. must feature at the end of your company name.

3: Determine the Company Structure

Shareholders: Who will own shares in the company? The shareholders are the most important people in a company as they own the business. At least one shareholder is required to form a limited company.
Directors: Companies House will need at least one directors name and details.
Company Secretary: This role is optional since the Companies Act 2006. A Company secretary can always be added at a later date.

4: Prepare Your Company Documents

Memorandum of Association: This document states the subscribers’ agreement to form the company and take at least one share each. The subscribers are the people who will be shareholders in your business. Use our service and we will prepare this electronically on your behalf, submitting this to Companies House.
Articles of Association: Defines how your company will run, including rules about shares and directors’ powers.
Using our service we will prepare this document for you and send this to Companies House.

5: Register Your Company

Online Registration: The most straightforward method is using our company formation service or the more complex Companies House online service.
- Documents: Submit the Memorandum and Articles of Association.
- Information: Provide details like company name, registered office address, director(s) details, PSC (Person with Significant Control) details and shareholder information.
- Fee: There’s a government fee for registration, currently £50 for an online application.
Post: Alternatively, you can send the documents by post, but this takes longer.

6: Get Your Company Number and Certificate

Upon successful registration, Companies House will issue:
- Company Number: A unique identifier for your business. And a Certificate of Incorporation: This is your legal proof of being a limited company. It is the birth certificate of your company.

7: Registering for Corporation Tax

HMRC: You do not need to do anything to register your company for Corporation Tax with HM Revenue & Customs (HMRC). HMRC will receive your registration details from Companies House and contact you around 2-3 weeks after your company is registered. This is actually a notice to file a CT600 corporation tax return.
When you register with us we provide full guidance on this.

8: Set Up PAYE if Employing Staff

If you employ staff, you must register for PAYE (Pay As You Earn). This handles income tax and National Insurance contributions for employees.
LaunchList® has tutorials to help you do this or you can request our help.

9: Consider VAT Registration

Turnover: If your turnover exceeds £90,000 per year, you must register for VAT. Alternatively, voluntary registration can be beneficial for reclaiming VAT on purchases.
LaunchList® has comprehensive tutorials to help show you how to register for VAT, or you can request our help.

10: Obtain Necessary Permits and Licenses

Most consulting businesses don’t require specific licenses. However, if you’re offering regulated financial advice, legal services or any industry-specific advice that requires accreditation, ensure you have the relevant permits or professional qualifications. For example, financial consultants may need accreditation from the Financial Conduct Authority (FCA).

11: Insure Your Business

Consulting firms face various risks, such as client disputes, data breaches, and professional liability. Consider purchasing business insurance, such as:

Professional Indemnity Insurance: Covers legal expenses and compensation if a client claims that your advice caused them financial loss.
Public Liability Insurance: Covers any claims for damage or injury that occur at your place of work.
Cybersecurity Insurance: Protects against data breaches and cyber incidents, which can be a concern if you handle sensitive client data.

12: Regular Compliance

Annual Confirmation Statement: File this annually to update company details with Companies House.
Accounts: File annual accounts. Dormant companies have simpler requirements.

LaunchList® contains self-help tutorials to show you how to manage filing your confirmation statement.
You can reach out to us for extra support and for accountancy recommendations via the MYCW client dashboard.

13: Registering a Domain Name and Obtaining an Email Address

In today’s digital age, an online presence is crucial for any business, including consultation companies.

Domain Name: Choose a domain name that reflects your business identity. It’s often beneficial to align it closely with your company name for brand consistency. Use our domain registration service

Protect your Company Domain Name

Use our domain name search tool to find available names for your business.

Email Address: Once you have your domain, set up a professional email address. We have “no technical skills required” email setup to allow you to create email addresses like info@yourconsultationcompany.co.uk. This not only looks professional but also helps in keeping business communications separate from personal emails.

This step enhances your business’s credibility, facilitates better marketing and improves customer communication, which are all vital in the industry where trust and professionalism play significant roles.

Final Thoughts

Forming a consulting company in the UK requires careful planning, registration and compliance with legal and financial regulations. As you gain experience, focus on building client relationships, refining your services and continuously expanding your industry knowledge to ensure your business remains competitive.

LaunchList® can provide you essential guidance to ensure all formalities are met, setting your consultation company up for success.

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