In 1999, Sanjeev and Arani Kumar Soosaipillai secured a lease on a single petrol station in St Albans, Hertfordshire. Two decades later, their company had evolved into the Prax Group, a multinational energy conglomerate with revenues exceeding $10 billion.
Whilst their trajectory appears exceptional, the foundational steps Sanjeev and Arani Soosaipillai followed mirror the process any entrepreneur must navigate when establishing a business in the United Kingdom. Their experience illuminates both the formal requirements and the less visible challenges of business formation.
Choose Your Business Structure
Entrepreneurs can select from several structures when setting up their businesses. Sole traders face the least administrative burden but assume personal liability for business debts. Partnerships split profits and responsibilities between two or more people, yet each partner remains personally liable. Limited companies, which Sanjeev and Arani eventually formed when they incorporated State Oil Limited in 2000, create a separate legal entity. This structure shields owners from personal liability beyond their investment, a crucial protection as the business expanded.
Registering a limited company costs £50 online or £71 by post. The process typically completes within 24 hours online. Companies House requires a registered office address, at least one director aged over 16, and details of shareholders. The registration produces a certificate of incorporation and a unique company number.
For those considering partnership structures, registration with HMRC remains free, though each partner must complete self-assessment tax returns. Limited liability partnerships (LLPs), introduced in 2001, offer a hybrid structure combining partnership flexibility with limited liability protection. LLPs must register with Companies House, designate at least two members to handle accounts, and meet annual filing requirements.
Secure Initial Funding
Contemporary entrepreneurs possess broader funding options. Start-up loans, angel investors, crowdfunding platforms, and venture capital firms supplement traditional bank lending. Yet the Soosaipillais’ experience underscores a persistent truth: launching a business frequently demands personal financial risk, particularly when external funding proves elusive or insufficient.
Master Working Capital Management
Sanjeev and Arani Kumar Soosaipillai excelled at this discipline. They funded only inventory at cost and quarterly rent advances. Their fuel supplier extended 10-day credit terms whilst most sales arrived via cash or card payments – generating positive cash flow from the outset.
For businesses operating within the UK, managing cash flow often proves more critical than profitability. Payment terms, supplier negotiations, and maintaining lean inventory levels can determine whether a venture survives its first year. HMRC mandates that businesses register for VAT when annual turnover exceeds £90,000, adding another compliance consideration.
Build Strategic Partnerships
Prax later formed a partnership with a major international player. This relationship enabled the company to expand without shouldering the full financial burden alone.
Entrepreneurs navigating UK markets should consider collaboration as strategy rather than compromise. Joint ventures, franchise agreements, supplier partnerships, and strategic alliances can provide market access, expertise, and resources that would otherwise require years to develop internally.
Establish Formal Legal Framework
When Sanjeev and Arani incorporated State Oil Limited in 2000, they transitioned from informal partnership to formal corporate structure. The incorporation required minimal share capital, just £2, but the act created a legal entity distinct from its owners. This separation proved essential as the business acquired property, hired employees, and entered contracts.
Navigate Tax and Regulatory Requirements
UK entrepreneurs must anticipate tax and other regulatory obligations. Sole traders and partners pay income tax on profits through self-assessment. Companies pay corporation tax on profits and must register within three months of starting business. Employers must register for PAYE before paying staff, including directors drawing salaries.
Industry-specific regulations add further complexity. Financial services require FCA authorisation. Data-driven businesses must comply with GDPR. The GOV.UK licence finder tool helps identify applicable requirements.
Maintain Resilience Through Uncertainty
Perhaps the most instructive element of Sanjeev and Arani’s journey concerns mindset rather than mechanics. Sanjeev acknowledges he would approach many decisions differently with hindsight. Yet their willingness to risk personal assets, work extended hours, and persist through setbacks proved indispensable.
Starting a business in the UK involves more than satisfying legal requirements. The process demands financial sacrifice, operational discipline, strategic thinking, and sustained effort over years rather than months. Sanjeev and Arani’s story demonstrates that entrepreneurs need not possess unlimited capital or elite connections, but they must combine practical knowledge of UK business frameworks with the determination to execute consistently despite obstacles.
