Operating a Business

flag United Kingdom United Kingdom: Operating a Business

In this page: Legal Forms of Companies | The Active Population in Figures | Working Conditions | The Cost of Labour | Management of Human Resources

 

Legal Forms of Companies

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
Company Directories
Companies House website, Companies House incorporates and dissolves limited companies, registers the information companies are legally required to supply, and makes that information available to the public. Companies House is an executive agency, sponsored by the Department for Business, Innovation & Skills.
 

Business Setup Procedures

Setting Up a Company United Kingdom OECD
Procedures (number) 4.00 5.21
Time (days) 4.50 9.47

Source: Doing Business - Latest available data.

 
For Further Information
Consult the Doing Business website, to know about procedures to start a Business in United Kingdom.
Trade Register
The Competent Organisation
Companies House
 

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.

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The Active Population in Figures

201820192020
Labour Force 34,331,42234,639,27434,738,347

Source: International Labour Organization, ILOSTAT database

 
201720182019
Total activity rate 77.41%77.73%78.01%
Men activity rate 82.17%82.40%82.42%
Women activity rate 72.67%73.08%73.62%

Source: International Labour Organization, ILOSTAT database

 
Employed Persons, by Occupation (% of Total Labour Force) 2015
Human health and social work activities 13.3%
Wholesale and retail trade; repair of motor vehicles and motorcycles 13.0%
Education 10.5%
Manufacturing 9.6%
Construction 7.2%
Professional, scientific and technical activities 7.0%
Public administration and defence; compulsory social security 5.9%
Accommodation and food service activities 5.2%
Transportation and storage 5.0%
Administrative and support service activities 4.8%
Information and communication 4.0%
Financial and insurance activities 4.0%
Arts, entertainment and recreation 2.7%
Agriculture, forestry and fishing 1.1%
Real estate activities 1.1%
Water supply; sewerage, waste management and remediation activities 0.7%
Electricity, gas, steam and air conditioning supply 0.6%
Mining and quarrying 0.5%
 
For Further Statistics
National statistics

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Working Conditions

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.

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The Cost of Labour

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.
Competent Organization
Department for Work and Pensions (DWP)

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Management of Human Resources

 

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
Craigslist
 

The Contract

Type of Contract
Legal clauses regulate employment contracts and to a lesser degree collective agreements and individual negotiations.

Breach of Contracts

  • Retirement
The State Pension age is currently 65 for men and 60 for women, but it will rise to 66 for everyone by 2020. Your working life is the period over which you have to have met the contribution conditions for the basic State Pension. It is normally 49 years.
  • Dismissals
All information available on Advice guide.
Labour Laws
Advice guide
UK government
Consult the Doing Business website, to obtain a summary of the labour regulations that apply to local entreprises.
 

Dispute Settlement

 

Conciliation Process

Cases of Dispute
Physical violence, moral harassment, sexual harassment, working conditions, etc.
  • Legal Framework
The arbitrator (acting alone or chairing a panel) considers the written and oral submissions of the parties, makes a decision, and where appropriate, an award which the parties agree to accept and implement. The arbitration process is confidential, relatively fast, cost efficient, non-legalistic and informal.
Further information on Labour relations agency.
 

Judicial Structures

  • Legal Framework
Labour Laws
  • Competent Legal Body
Labor relations agency.
 

Social Partners

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.
Unions
TUC
Scotland TUC
Wales TUC
UNITE
Regulation Bodies
Department for Work and Pensions
 
 

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Latest Update: June 2022