MP for Windsor
Working Hard For You
Online business registration rates

Adam Afriyie (Windsor, Conservative): To ask the Secretary of State for Business, Innovation and Skills what assessment he has made of the effect of online business registration on registration rates; and if he will make a statement.

Michael Fallon (The Minister of State, Department for Business, Innovation and Skills; Sevenoaks, Conservative): There is no register covering all businesses in the UK. The Registrar of Companies registers a subset of businesses and provides online registration for those businesses that register as companies or limited liability partnerships. HMRC registers sole traders for tax purposes.

Online incorporation via software filing agents was introduced in July 2001, followed in April 2010 by the launch of the Citizen Incorporation Service via Companies House Webfiling. The number of companies on the register has almost doubled, from 1.66 million at the end of March 2001 to 3.25 million at March 2014. In the financial year 2013-14, 98% of all new companies were incorporated electronically.

Companies House has carried out several studies to identify the main factors contributing to the increasing trend for company incorporations. This is attributed to a number of combined factors, such as the benefits of limited liability, changes to tax legislation and developments in the wider UK economy. There is no indication that the electronic enablement of company registration in itself has acted as a direct driver for the increase in new company registration rates, as just one of the methods the Government has used to help reduce the burden on business and the costs of running a company. This in turn has helped to make the UK one of the best places to set up and run a company.

Electronic services have also enabled Companies House to absorb the significant additional workload resulting from the growing register, make organisational efficiency savings and pass these efficiencies on to customers in the form of lower fees. For incorporation, the UK charges some of the lowest fees in the world.