Throughout various historical developments, the UK has remained a hot spot for businesses representing a plethora of industries and sectors. In recent times, political uncertainty played a big role in presenting the UK as a region that lacks the interests of entrepreneurs. However, despite the myth that business activities were declining in the UK in 2018, the year 2018 marked another strong year for business operations in the United Kingdom.
In 2018, 669,855 companies were formed in the UK, up from 634,116 in 2017. The massive improvement in the number of businesses that were formed in the UK in 2018 is an indication of the business confidence in the United Kingdom. Even though political uncertainty remained a feature of the UK economy in 2018, entrepreneurs were increasingly becoming confident that the UK economy would perform positively in the long run, as has always been the case. In fact, 2018 was a year in which UK entrepreneurs realized the fact that political uncertainty is only a temporary phenomenon.
Along with the higher number of companies that were incorporated in 2018, the number of UK companies at the end of 2018 stood at a record high.
Of the businesses that were incorporated in the UK, over a third were formed in London, which continues to make London the preferred business location of new founders. This doesn’t come as a surprise considering that London is one of the busiest business hubs in the world. In addition to London, West Midlands and Greater Manchester areas remained as hot spots for new business startups in the UK in 2018.
However, at the same time, a special emphasis should be placed on the number of companies that were dissolved in 2018. While more than 669,000 companies were incorporated in 2018, a staggering 504,613 companies were dissolved during the same period. This could well be an indication of the challenges faced by businesses in the UK at the moment, which highlights the importance of carefully monitoring the business conditions of the UK before jumping on to investment decisions that involve the formation of new companies. At the end of 2018, sole proprietorships dominated the business presence in the UK by accounting for 59% of all businesses operating in the UK. Private Limited Companies accounted for 34% of the businesses in the UK while partnerships represented 7% of businesses in the United Kingdom. This confirms the belief that sole proprietorship is the preferred ownership structure of new business ventures in the United Kingdom. Understandably, many such sole proprietorship companies in the UK employed only one person, the owner of the company. In line with historical trends, Small and Medium Enterprises (SMEs) accounted for nearly 99.5% of businesses in every main industry sector in the UK. Once again, this confirms the long-standing nature of business operations in the UK; investors prefer to go solo or work with a small team to drive the business forward. The number of public listed companies in the UK remained flat at 2,112 as of June 2019. Listed companies in the UK over the years
2018 certainly was not a bad year from the perspective of new company formation in the UK and the momentum is expected to continue in 2019 and beyond as business activities pick up in the region and business confidence improves.