Starting a purpose-led brand is an exciting journey, especially in the dynamic UK FMCG market. For those of you building a business that balances profit with people and planet, laying the right legal foundation is crucial, it’s the first step towards achieving that highly-prized B Corp Certification. Here is your essential, purpose-driven roadmap for setting up your company in the UK.
Step 1: Choosing Your Purpose-Driven Legal Structure
Your choice of legal structure is the most important decision for a future B Corp.
For a typical FMCG brand looking to raise investment and scale, the standard choice is a Private Company Limited by Shares (Ltd). This structure offers limited liability, protecting your personal assets from business debts, and allows you to issue shares to investors.
The B Corp Pre-Requisite: Embedding Purpose
For B Corp certification, you must legally embed your social and environmental purpose into your company’s DNA.
Key Action: From the outset, ensure your Articles of Association (your company’s rulebook) are drafted to include specific wording (provided by B Lab) that commits the directors to consider the impact of their decisions not just on shareholders, but on workers, community, environment, and customers (stakeholders).
This is the Legal Requirement and getting it right from the start avoids costly amendments down the line. But don’t panic, if you start out with the standard Articles of Association, then it is possible to change this.
Step 2: Registering Your Company with Companies House
Once you have your structure and purpose defined, it’s time to make it official.
- Name Check: Choose a unique company name. Use the Companies House checker to ensure it’s not already registered.
- Prepare the Details: You’ll need:
– A Registered Office Address (must be a physical UK address, publicly visible).
– Details of at least one Director and at least one Shareholder.
– A Statement of Capital (details of the shares).
– Your Memorandum and Articles of Association (which must contain the B Corp legal commitment if you’re planning for it early).
– A Standard Industrial Classification (SIC) Code which identifies your business activity (e.g., ‘10710: Manufacture of bread; manufacture of fresh pastry goods and cakes’). - File for Incorporation: You can register online with Companies House—it’s quick and costs a small fee. Once complete, you’ll receive a Certificate of Incorporation and your unique company number. Alternatively you can ask an accountant to do this for you.
Step 3: Getting Your Tax and Regulatory House in Order
As an FMCG brand, compliance is key, especially for product safety and financial transparency.
Corporation Tax: Your Limited Company must register for Corporation Tax with HMRC within three months of starting to trade.
VAT: You must register for VAT if your annual VAT-taxable turnover exceeds the threshold (currently £90,000), but you can register voluntarily earlier. Some businesses choose to do so to reclaim VAT on initial startup costs, but seek advice from your accountant on this.
PAYE (for Employees): If you plan to hire staff, you must register as an employer with HMRC to operate the Pay As You Earn scheme.
Food & Product Regulation:
– You must comply with all UK food and safety regulations (e.g., allergen labelling, nutritional information).
– You’ll likely need to register your food business with your Local Authority at least 28 days before opening or starting production.
Data Protection: As you’ll be handling customer and employee data, you must register with the Information Commissioner’s Office (ICO).
There are plenty of other things to consider, download our checklist here for a more comprehensive list.
Step 4: Building the Purpose-Led Framework
This step is essential for purpose-driven brands and will significantly streamline your path to B Corp certification once you are eligible (after 12 months of trading).
Draft Key Legal Documents: Alongside your Articles, consider a robust Shareholders’ Agreement and Directors’ Service Agreements that clearly reference and align with your commitment to broader stakeholder interests. New investors or partners must understand and accept your legally binding purpose.
Focus on Documentation for the B Impact Assessment (BIA): The new standard BIA, covers five areas: Governance, Workers, Community, Environment, and Customers. Start implementing policies now:
– Purpose and Stakeholder Governance: Document board decisions that consider stakeholders.
– Fair Work: Implement fair pay, benefits, and robust employee policies.
Justice, Equity, Diversity & Inclusion (JEDI): Maintain inclusive and diverse workplaces.
Human Rights: Treat people with dignity and respect their human rights.
Climate Action: Take action to combat the climate crisis
Environmental Stewardship and Circularity: Track and document your supply chain impact, waste reduction, and sustainable sourcing policies.
Government Affairs and Collective Action: Foster shared understanding and implement solutions toward an equitable, inclusive and regenerative economy.
Step 5: Preparing for B Corp Certification
You can become a Pending B Corp if your business is less than 12 months old, which is a great way to signal your commitment early.
After 12 months of trading, you can pursue full certification:
- Complete the B Impact Assessment (BIA): This free online tool is where you’ll demonstrate your operational impact.
- Verify Legal Requirements: Confirm your Articles of Association contain the B Corp commitment (which you should have done in Step 1!).
- Submission and Verification: Submit your BIA for B Lab’s rigorous review process.
By proactively embedding your purpose into your legal structure and operational policies from day one, you won’t just be setting up a compliant UK company; you’ll be building a resilient, purpose-led FMCG brand ready to join the global B Corp movement.