United Kingdom: Operating a Business

Choose a legal structure for your business

Private limited company by shares or Ltd

Number of partners: One or more directors
Capital (max/min): No minimum share capital requirements, typically the minimum subscribed is GBP 1. The entire capital must be unlocked.
Shareholders and liability: Liability is limited to the amount contributed.

Public limited company (Plc)

Number of partners: One or more directors
Capital (max/min): Minimum share capital requirement is GBP 50,000 of which 25% must be paid-up
Shareholders and liability: Liability is limited to the amount contributed.

General partnership

Number of partners: At least two partners
Capital (max/min): No minimum capital requirements
Shareholders and liability: Partners' liability is joint and indefinite.

Limited liability partnership (LLP) or Limited partnership (LP)

Number of partners: At least two partners
Capital (max/min): No minimum capital requirements
Shareholders and liability: Liability is limited.

Community interest company

Number of partners: No minimum
Capital (max/min): No minimum capital requirements
Shareholders and liability: Partners' liability is joint and several

Unlimited company ou Unltd

Number of partners: No minimum
Capital (max/min): No minimum capital requirements
Shareholders and liability: Partners' liability is joint and several

Business Setup Procedures

The Competent Organisation

Companies House

For Further Information

Consult the Doing Business website, to know about procedures to start a Business in United Kingdom.

Financial Information Directories

Companies House - Register of British companies

Dun & Bradstreet - Worldwide directory with financial information on businesses

Recovery Procedures

Bankruptcy Laws

The idea governing UK bankruptcy law is to give "honest" debtors a clean start by relieving them of the majority of their debts and enabling them to repay their creditors via the sale of any existing assets. More information on Clear start.

For Further Statistics

National statistics

Opening Hours

 

• Legal Weekly Duration

There is no specific number of hours that makes someone full or part-time, but a full-time worker will usually work 35 hours or more a week. (gov.co.uk)

• Maximum Duration

The average working hours are calculated over a 17-week period. You can work more than 48 hours in one week as long as the average on this period is less than 48.

• Night Hours

Under the Working Time Regulations, night time is described as the period between 11.00 pm and 6.00 am. You're considered as a night worker if you regularly work for at least three hours during this period. As a night worker, you shouldn't work more than an average of eight hours in each 24-hour period, (excluding overtime).

Working Rest Day

If you're an adult worker you usually have the right to 24 hours clear of work each week or 48 hours clear each fortnight.

Paid Annual Vacation

A salaried employee is entitled to a minimum of 5.6 weeks.

Retirement Age

Default retirement age (formerly 65) has been phased out - most people can now work for as long as they want to. Retirement age is not the same as State Pension age, which can be between 61 and 68, depending on the person's date of birth and gender.

Child Labour and Minimum Age For Employment

13 for part time work. The website WorkSmart from the TUC shows that the type of work is restricted to light agricultural or horticultural work or as allowed by by-laws. Thus, the true minimum age for general work is 14 years. 16 is the minimum age for a full time work (if left school) and 18 for night work.

Pay

Minimum Wage

The minimum hourly rate is GBP 9.50  (source: GOV.UK).

Average Wage

According to the Office for National Statistics, median annual pay for full-time employees was £31,285 for the tax year ending 5 April 2021, down 0.6% on the previous year.

Other Forms of Pay

• Pay For Overtime

There's no legal right to pay for working extra hours, and there are no minimum statutory levels of overtime pay, although your average pay rate must not fall below the National Minimum Wage.

• Pay For Night Hours

Your employer might decide to reward you for working antisocial hours (for example, you may get free transport, food or extra pay). You only have a legal right to any of these if your contract says you do, but it's good practice for employers to offer them.

• Pay For Overtime at Night

If your night work involves special hazards or heavy physical or mental strain, you can't be made to work more than eight hours in any 24-hour period. This includes overtime. More information on Direct.gov.uk.

Social Security Costs

The Areas Covered

National insurance (NI) covers pension, employment and support allowance, maternity allowance and bereavement benefits.

Contributions

Contributions Paid By the Employer: In general, national insurance contributions are taxed at 15.05% on all earnings in excess of £175 per week and are deductible for corporate income tax. For more details on thresholds, refer to the gov.uk website here. Information regarding social security arrangements between the UK and the UE is also available on the gov.uk website here.
Contributions Paid By the Employee: National insurance (NI) contribution is a withholding tax on payroll. Employees are classified as Class 1. In general, national insurance contributions are taxed at 13.25% if weekly pay is £190 to £967 and 3.25% if weekly pay is over £967. Class 1 contributors pay less if they are in a contracted out workplace pension, a married woman or a widow, or are deferring NI as they have more than one job. Information regarding social security arrangements between the UK and the UE is also available on the gov.uk website here.

Recruitment

Method of Recruitment

Increasing numbers of applications are completed by Internet. Nevertheless, recruitment agencies and head hunters are the most common ways to be recruited.

Recruitment Agencies

Reed.

Recruitment Websites

Reed
Search
Jobsite
Indeed
Monster

The Contract

Dispute Settlement

Social Partners

Employer Associations

CBI - The Confederation of British Industries
FSB - Federation of Small Businesses

Social Dialogue and Involvement of Social Partners

Union membership has been relatively stable in the past few years, although the trend has been slightly downward over the past decade. About 20% of full time UK employees belong to a union, a low proportion by UK historical standards. Public sector workers have a much higher share of union members (60%) while the private sector is about 15%. Manufacturing, transport, and distribution trades are highly unionised. Unionisation of the workforce in the UK is prohibited only in the armed forces, public-sector security services, and police forces.

The following confederations can be listed : UNITE (British and Irish trade union), TUC ( TRADE UNION CONGRESS), STUC ( THE SCOTTISH TRADE UNION CONGRESS) and Wales TUC.

Unionisation Rate

25.4% in 2014.

Labour Unions

TUC
Scotland TUC
Wales TUC
UNITE

Regulation Bodies

Department for Work and Pensions