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Posted: Mon 17th Feb 2025
There were a record 5.63 million active companies registered with Companies House at the end of 2024, but the number of new incorporations saw a decline compared to 2023.
The report by NatWest and Beauhurst found that the active companies figure was up 3%, while the number of new incorporations fell by the same percentage to 846,325.
The property sector saw the largest percentage increase in new business formations. It rose by 38% year-on-year to 44,000. In the food industry, 22,000 new takeaway shops and food stands were set up, a 14% increase compared to 2023, while almost 38,000 management consultancy businesses were registered, a 10.7% rise.
Although there was a 1.46% decline in 2024, new incorporations registered as "retail sale via mail order houses or via internet" continued to be the most popular, reflecting the importance of ecommerce in the UK.
The overall decline in new business formations led to a fall in all regions apart from Northern Ireland which saw a 26% rise. London continued to be home to most business formations with 286,000 new incorporations.
Companies with all-male directorship teams continued to represent the majority of new firms, although there was a small shift towards more gender balanced boards. Businesses with mixed-gender directors rose from 10.4% of all incorporations in 2023, to 11.3% in 2024.
However, the number of all female founding directors saw a decline. It was 159,000 last year, compared to 164,000 in 2023.
James Holian, head of business banking at NatWest, said:
"It's a testament to the UK's reputation as a nation of entrepreneurs that the number of active companies operating in the UK stands at a record high. But with the number of company incorporations falling slightly as 2024 progressed, there is still more to be done to give prospective entrepreneurs the confidence and tools to start a new business.
"As we move into 2025, with the number of incorporations projected to fall from the exceptionally high numbers of the past few years, it's vital that the public and private sectors work together to give young start-ups the support, guidance and tools they need to survive and grow, no matter what environment they might face."
Gareth Thomas, minister for small business, said:
"Seeing a record number of active businesses shows the ambition of our country's entrepreneurs and that the UK is a fantastic place to start and grow a company."
"Our plan for change will continue to back businesses to grow the economy and help business owners turn their ideas into long-term success."
Henry Whorwood, managing director at Beauhurst, said:
"Companies House data shows there are now 5.6 million active companies operating in the UK -- a new record. Whilst there was a slight decline in company incorporations last year, UK entrepreneurs are still starting lots of new businesses.
In 2024 Companies House began phasing in greater checks to ensure the legitimacy of companies so it's reasonable to suspect that alongside this growth in the base population that the share of fraudulent activity has gone down."
