In short: Most UK businesses do not need a general licence to trade, but many activities do, such as selling food or alcohol, financial services, taxis, childcare and some construction work. The rules depend on what you do and where you do it, so check with your local council and any regulator for your sector before you start.
Registering a limited company with Companies House gives your business a legal identity. It does not give you permission to carry out every type of work. Some activities need a licence, permit or registration from a council or a regulator before you start.
This guide explains, in plain terms, how to work out whether your business needs one.
Company registration is not a licence
When Companies House registers your company, it checks your details and adds the company to the public register. It does not check whether you are allowed to sell alcohol, give financial advice or run a nursery. Those permissions come from other bodies.
So the order is usually:
- Form your company (see Company Formation).
- Register for the taxes that apply to you with HMRC.
- Apply for any licences or registrations your activity needs.
- Start trading once you have them.
Activities that often need a licence or registration
The list below is not complete, but it covers common cases:
- Food businesses, including home bakers, cafes, takeaways and market stalls, must register with their local council. The Food Standards Agency says you should do this at least 28 days before you start trading.
- Selling alcohol usually needs a premises licence for the venue and a personal licence for the person who authorises sales.
- Financial services, such as lending, insurance, investments or consumer credit, are usually regulated by the Financial Conduct Authority (FCA).
- Taxis and private hire need licences for the driver, the vehicle and the operator, issued by the local council.
- Childcare in England is regulated by Ofsted. Scotland, Wales and Northern Ireland have their own regulators.
- Waste - if you carry or deal with waste as part of your business, you may need to register as a waste carrier.
- Street trading, events and entertainment often need council permission.
- Playing music in public, for example in a shop, gym or salon, usually needs a music licence.
- Security work, scrap metal dealing and some estate agency work have their own rules and registrations.
- Gas work needs registration with the Gas Safe Register.
Rules differ across the UK
England, Scotland, Wales and Northern Ireland do not always have the same licensing rules. Councils also set many of their own conditions and fees. A licence in Glasgow does not automatically cover a shop in Manchester. Always check the rules for the place where you will trade.
How to check what your business needs
- Describe your activity clearly. "Online shop" is too broad. "Selling homemade cakes online and at markets" is clear.
- Search GOV.UK and your council's website. Many councils list their licences online, with forms and fees.
- Check whether your sector has a regulator. Finance, health, care, education, energy and transport usually do.
- Ask your landlord and insurer. Your lease or insurance policy may have conditions about how you use the premises.
- Allow time. Some licences take weeks or months, and some need a public notice period.
Other registrations that are not licences
Even when no licence is needed, you may still need to register for things such as:
- Corporation Tax - a company must register with HMRC within 3 months of starting to trade.
- VAT - when your taxable turnover passes the VAT registration threshold.
- PAYE - if you pay employees, including yourself as a director in many cases.
- Data protection - many businesses that handle personal data must pay a fee to the Information Commissioner's Office (ICO). Check whether you are exempt.
Common mistakes
- Starting to trade before a licence is granted. This can lead to fines or a refused application.
- Assuming a licence moves with you when you change premises or company. Many licences are tied to a person, a place or a business, and cannot simply be transferred.
- Forgetting renewals. Many licences last for a set period.
- Trading as a sole trader and then forming a company without updating the licence holder's name.
If you are unsure, speak to the licensing team at your council or to a solicitor who knows your sector.
How Form My Company can help
We form your company, register it for Corporation Tax and, with the Fully Inclusive Package, handle VAT and PAYE registration too. Most companies are registered within 24 hours. We do not issue licences, but we make sure your company details are correct and ready for any application. Need a professional address for your licence paperwork? See our Registered Office Address service.
Frequently asked questions
Do I need a licence to start a limited company?
No. You register a company with Companies House, but that is not a licence to trade. You may still need licences for the specific activity you carry out.
Do I need a licence to sell food from home?
You usually need to register your food business with your local council. The Food Standards Agency says to do this at least 28 days before you start trading.
Who issues business licences in the UK?
Most are issued by local councils. Some sectors, such as financial services, are regulated nationally by bodies like the FCA.
Can I transfer a licence to my new limited company?
It depends on the licence. Some are personal, some are tied to premises and some must be applied for again. Check with the issuing body before you switch.