Registering your Business
When starting a business one of the first questions you might be asking is ‘Who do I need to tell?’ This article aims to take you through some of the options available and what steps are included in registering your business.
There are many entity types which a business can take which you may have heard being used including: Limited Company, Foundation, Partnership, LLP, LLC, PLC, ICC, the list goes on. Here we will be focusing on general information for the two options most commonly taken by businesses either registering as a Sole Trader or a Limited Company. Quite often the first thing small businesses do is to register as a Sole Trader and then when your business is further along you can register as a Limited Company. Reasons for registering as a Limited Company are outlined below. For more specific information to your situation you might want to seek legal advice.
What is a Limited Company?
A Limited Company is a legal entity meaning that assets and liabilities can be owned by the Company not a person. In its basic form a company has shareholders who own the company and directors who run the company (in most cases for small companies these will be the same people). The Guernsey Company law requires each company to have at least one Director and an elected Resident Agent, this is someone based in Guernsey who is responsible for the beneficial ownership information.
Why choose to register as a Limited Company?
The main reason that businesses incorporate as a Limited Company is down to risk management as a company structure offers limited liability. This means if the company were to fold the personal assets of the parties involved are protected (as long as the company was managed correctly). A company structure also eases the process when exiting or selling the business as the business can continue to operate after you leave or you can sell the business through the transfer of shares.
What is involved?
The registration of a Limited Company can only be submitted by a Corporate Service Provider (CSP) in Guernsey. The Guernsey Registry has a list of CSPs who offer these services and will be able to take you through the process for your situation, which you can see here:
Once you have registered your company there are certain requirements for which documents to hold and submissions to be made including the Annual Validation submission made yearly. The Guernsey Registry have put together an informative guidance note for Directors covering the yearly document and submission requirements which can be found here:
Sole Trader / Solopreneur
What is a Sole Trader?
A Sole Trader is a person who sets up and owns their own business. Unlike a Limited Company a Sole Trader has unlimited liability meaning that unless covered by insurance all liabilities are covered by the owner.
What is involved?
The first step is contact Revenue Services to tell them that you have started a business and to give them information including:
- What type of business you are running.
- The date you started the business.
- When you will be preparing the first set of accounts.
Full details of the process and what information is required can be found in this Gov.gg article here:
Once you have started the business you will need to keep records of income and expenditure including invoices, receipts, etc. A guidance note of all the records you need to keep can be found here:
The Guernsey Registry have guidance notes on the process of incorporating a Limited Company, along with a list of Corporate Service Providers.
The States of Guernsey Revenue Services (formerly Income Tax & Contributions) have put together a full guide of the process and requirements for tax and and contributions when starting up a business.
Where to go for more help?
Check out our Startup Hub for more information on support programmes and activities you can get involved in. You can visit our Entrepreneurship page to read articles and listen to podcasts about how to start a business in Guernsey, including details about first steps, finances and marketing. Or if you would like some one-to-one support from the Digital Greenhouse team, please fill in the enquiry form below or email firstname.lastname@example.org