How to Set Up as a Limited Company in the UK

If you’re thinking about starting a business, one of the most common questions is “How do I set up a limited company in the UK?”

A limited company can give you greater protection, a more professional image, and in many cases, better tax efficiency compared to being self-employed. The process isn’t difficult, but there are some important steps you’ll need to follow.

This guide explains how to register a limited company in the UK, what you’ll need, and the key responsibilities that come with it.

Step 1: Choose a Limited Company Name

Your business name must be unique and can’t be too similar to an existing company. You can use the Companies House name checker to make sure it’s available.

• The name must end in “Limited” or “Ltd.”

• Avoid sensitive or offensive words.

• Think about branding – your company name will appear on contracts, invoices and marketing.

Step 2: Appoint Directors and Shareholders

To register a limited company in the UK, you’ll need at least one director and one shareholder.

• The director is legally responsible for running the business and filing company information.

• The shareholder(s) own the company. You can be both the sole director and the only shareholder if you’re setting up alone.

• A shareholder is someone who owns part of a company. So make sure this is carefully considered, we also advise avoiding 50/50 splits due to potential decision-making deadlock.

Step 3: Prepare the Required Documents

When you set up your company, you’ll need two key documents, but don't worry too much as the standard version of each of these will be used if you don't provide a tailored version:

1. Memorandum of Association – a legal statement confirming the company has been created.

2. Articles of Association – rules for running the company. Most small businesses use the standard “model articles” provided by Companies House.

Step 4: Register with Companies House

The easiest way to form a company is online through Companies House. Here is a link to do so.

• The registration fee is £50.

• The process usually takes 24 hours.

• You’ll need your company name, director and shareholder details, a registered office address, and share structure.

Once completed, you’ll receive a Certificate of Incorporation, which proves your company legally exists.

Step 5: Register for Corporation Tax

After your company is set up, you must register for Corporation Tax within three months of starting to trade. This is done through HMRC using your company’s Unique Taxpayer Reference (UTR) and Government Gateway (a 12 digit user that will be emailed to you).

Failing to register can result in penalties, so it’s important not to overlook this step.

Step 6: Open a Business Bank Account

Because a limited company is a separate legal entity, you’ll need a dedicated business bank account. This helps keep your finances organised and makes it easier to file accurate accounts and tax returns. Our recommendation is Mettle by Natwest.

Step 7: Understand Your Ongoing Responsibilities

When you run a limited company, there are extra compliance requirements compared to being self-employed. Each year you’ll need to:

• File annual accounts with Companies House

• Submit a confirmation statement

• File a Corporation Tax return with HMRC

• Keep accurate financial and accounting records

Many directors choose to use an accountant to manage these responsibilities. This ensures everything is filed on time and gives you more time to focus on running your business. Please get in touch with us if you'd like us to be your accountant, our limited company services start from £300.

Is a Limited Company Right for You?

Setting up a limited company in the UK can be a smart move if you want to:

• Protect your personal assets

• Build a more professional image

• Take advantage of potential limited company tax benefits

• Grow and scale your business

However, there’s more administration compared to being a sole trader, so it’s worth weighing up the pros and cons before making the decision.

Final Thoughts

Registering a limited company in the UK is relatively simple, but it’s important to get it right from the start. By following the steps above, you’ll be set up correctly and ready to trade.

If you’d like expert support with setting up a limited company, registering with Companies House, or managing your company accounts, our team can help. We make the process straightforward, so you can focus on growing your business.