How to Set Up a Limited Company in the UK (2026)

Is a limited company right for you?

Before working through the mechanics of registration, it is worth confirming that incorporating is actually the right move. A limited company is a separate legal entity from you personally, which means limited liability for business debts, but it also comes with more admin, public disclosure of your accounts at Companies House, and a different — not automatically lower — tax bill. If you have not already weighed this up, our guide to sole trader vs limited company walks through the tax comparison in detail. This article assumes you have decided to incorporate and covers exactly how to do it.

Step 1: Choose your company name

Your company name must be unique — Companies House will reject a name that is the same as, or too similar to, an existing registered company. It must end in "Limited" or "Ltd" (or the Welsh equivalents if your registered office is in Wales), and it cannot contain certain sensitive words without permission (for example, anything implying a government connection, or words like "Chartered" or "Institute").

You can check name availability directly on the Companies House website before you start the registration itself. It is also worth checking whether the matching domain name and social media handles are free — a name that is legally available but already taken everywhere else online creates avoidable friction later.

Step 2: Choose a registered office address

Every UK limited company needs a registered office address — this is a public record and is where official correspondence (from Companies House, HMRC, and anyone taking legal action) is sent. It must be a physical UK address; a PO box alone is not acceptable.

Many small business owners initially use their home address, but this makes that address public on the Companies House register permanently. A registered office service (often bundled with an accountant or company formation agent) is a common way to keep your home address private, typically for a modest annual fee.

Step 3: Appoint directors and shareholders

A private limited company needs at least one director, who must be a real person aged 16 or over (there is no upper age limit and no UK residency requirement, though most small companies have UK-resident directors). You also need at least one shareholder — for a one-person company, the sole director is usually also the sole shareholder, holding all the issued shares.

Decide the initial share structure at this stage: how many shares are issued, at what nominal value, and to whom. For most small companies starting out, a simple structure — a small number of £1 ordinary shares held by the founder(s) — is sufficient, and can be restructured later if the business grows or brings in investors.

Step 4: Prepare your memorandum and articles of association

The memorandum of association is a short, standard statement confirming that the founding members agree to form the company — this is generated automatically as part of online registration. The articles of association are the company's internal rulebook, covering things like how decisions are made and how shares can be transferred.

Most small companies adopt the standard "model articles" provided by Companies House rather than drafting bespoke articles, which is faster and sufficient for the vast majority of straightforward small businesses. Bespoke articles are usually only needed where there are multiple shareholders with different rights, or specific arrangements you want to lock in from the start.

Step 5: Register with Companies House

Registration (also called incorporation) can be done three ways:

• Directly online via the Companies House website — the cheapest and usually fastest route, often completed within 24 hours
• Through a company formation agent — a paid service that handles the paperwork for you and often bundles extras like a registered office address or company bank account introduction
• By post using form IN01 — slower, and used less and less

Whichever route you use, you will need to provide: the company name, registered office address, details of directors and shareholders (including a residential address, which is not published, and identity information), the share structure, and a SIC code describing your business activity.

Companies House registration and confirmation statement fees change from time to time — check the current fee on the Companies House website before you register, rather than relying on a figure quoted here or elsewhere, since these have been revised in recent years.

Once approved, you will receive a certificate of incorporation confirming your company number and incorporation date — keep this safe, as banks and other institutions will ask for it.

Step 6: Register for Corporation Tax

Within 3 months of starting to trade (not from the date of incorporation, if these differ), you must register the company for Corporation Tax with HMRC. This is a separate step from Companies House registration and is easy to overlook if you incorporate the company some time before you actually begin trading.

Registering for Corporation Tax also sets up your Unique Taxpayer Reference for the company and starts the clock on your first accounting period, which determines your Corporation Tax and annual accounts deadlines.

Step 7: Open a business bank account and get compliant software running

A limited company must keep its finances entirely separate from its directors' personal finances — this is not optional the way it sometimes is for sole traders. Open a dedicated business bank account as early as possible, ideally before the company starts trading, and set up Xero or QuickBooks with a bank feed connected from day one.

Getting bookkeeping right from incorporation avoids the far more time-consuming (and expensive) job of reconstructing a year of company transactions from a personal account at year end.

Ongoing obligations once you're incorporated

Incorporation is the start of a set of recurring obligations, not a one-off task:

• File a confirmation statement at Companies House at least once every 12 months, confirming the company's details are up to date
• File annual accounts with Companies House within 9 months of your accounting reference date (with a longer first-year deadline in some cases)
• File a Corporation Tax return (CT600) with HMRC within 12 months of your accounting period end, and pay any Corporation Tax due within 9 months and 1 day of the period end — see our guide to Corporation Tax rates and marginal relief for how that liability is calculated
• Run PAYE payroll if you or any employee draws a salary
• Register for VAT if turnover crosses the registration threshold, or voluntarily if it benefits the business
• Keep the company's statutory registers and records up to date

What it costs and how long it takes

Direct online registration with Companies House is inexpensive and, if your application is straightforward and your chosen name is available, usually completes within a day. Using a formation agent typically costs more but can be worthwhile if you want a bundled registered office address, document templates, or hand-holding through the process. Either way, budget for ongoing costs beyond the setup fee itself — accountancy fees for a limited company are typically higher than for a sole trader, reflecting the additional statutory filings.

QaisYasir Accounting Services' current service scope is bookkeeping, VAT/MTD, and management accounts. For company formation, Corporation Tax registration, and annual accounts filing, work alongside a qualified accountant — I am glad to get your bookkeeping and software set up correctly from day one so that handover is clean.