How to Set Up a Limited Company in the UK: Complete 2026 Guide

Setting up a limited company in the UK means creating a separate legal entity at Companies House. For most straightforward private companies, you can register online for £100, and Companies House says applications are usually processed within 24 hours.

However, limited company formation now involves more than choosing a business name and entering a director’s details. New directors must comply with Companies House identity verification requirements, companies need an appropriate registered office and registered email address, and directors take on ongoing legal, tax and filing responsibilities.

If you are setting up a Ltd company for contracting, consultancy, freelancing, a start-up or an established sole-trader business, it is worth getting the structure right before incorporation. Changing shares, ownership arrangements or accounting processes afterwards can create unnecessary administration and, in some cases, tax consequences.

Setting Up a Limited Company: Key Facts for 2026

Requirement	Current position
Standard Companies House digital incorporation fee	£100
Paper incorporation fee	£124
Typical online processing time	Usually within 24 hours
Minimum directors	1
Minimum shareholders for a company limited by shares	1
Minimum director age	16
UK residency required for directors?	No
Registered office	Required in the UK jurisdiction where the company is registered
Registered email	Required; not shown on the public register
Director identity verification	Required for new directors
Corporation Tax	19% small profits rate, 25% main rate, with marginal relief between the relevant thresholds
VAT registration threshold	More than £90,000 taxable turnover
Online Confirmation Statement fee	£50
Company Tax Return filing	Generally through commercial software from 1 April 2026

Companies House increased the standard digital incorporation fee to £100 and the online/software Confirmation Statement fee to £50 from 1 February 2026.

What Is a Limited Company?

A limited company is a separate legal entity from its owners and directors. This means the company can earn income, own assets, enter contracts, employ staff and owe debts in its own name, while shareholders’ liability is normally limited to the amount they have invested or agreed to pay for their shares.

Unlike a sole trader, where the individual and the business are legally the same person, a limited company has its own legal identity.

Most UK businesses that incorporate set up a private company limited by shares. These companies are owned by shareholders and managed by directors. One person can be both the sole shareholder and sole director.

A company limited by guarantee has guarantors rather than shareholders and is more commonly used for clubs, associations, membership organisations and some not-for-profit organisations.

Does limited liability mean directors can never be personally liable?

No, Limited liability provides significant protection, but it is not absolute. Directors still have statutory duties and can face personal consequences in circumstances such as misconduct, wrongful behaviour, personal guarantees, certain insolvency situations or breaches of their legal responsibilities.

Directors remain legally responsible for ensuring that company records, annual accounts, tax returns and required Companies House information are dealt with properly, even where an accountant or other professional handles the work on their behalf.

Should You Set Up as a Limited Company or Sole Trader?

Before registering a limited company, decide whether incorporation actually suits the business.

A limited company is not automatically the most tax-efficient option for every owner. Corporation Tax is only one part of the calculation. You also need to consider how money will be extracted from the company, National Insurance, dividend tax, administrative costs, pension planning, business risk and how much profit you intend to leave inside the business.

Sole Trader vs Limited Company

Issue	Sole trader	Limited company
Legal status	Owner and business are the same legal person	Separate legal entity
Business debts	Owner generally has unlimited personal liability	Shareholder liability is normally limited
Setup	Relatively simple	Must incorporate with Companies House
Tax on business profits	Income Tax and relevant National Insurance	Corporation Tax paid by company; further personal tax may arise when money is extracted
Taking money out	Owner can draw business profits	Must follow rules for salary, dividends, expenses and directors’ loans
Accounts	Generally less corporate administration	Statutory accounts required
Public disclosure	Less public financial information	Company and certain officer information appears on Companies House
Annual Companies House filing	No	Yes
Investment	Harder to issue equity	Shares can be issued subject to company law and the articles
Business continuity	Closely tied to proprietor	Company continues as a separate entity
Client requirements	Accepted by many clients	Some corporate clients prefer or require incorporated suppliers

GOV.UK similarly describes a sole trader as personally responsible for business debts, while a limited company is a separate legal entity with its own reporting and financial rules.

When starting a limited company often makes sense

Incorporation may be attractive where you:

• want greater separation between business and personal liabilities;
• expect the business to retain profits for future investment;
• want another person to own shares;
• intend to bring in investors;
• want clearer succession or ownership arrangements;
• work with customers that prefer incorporated suppliers;
• operate in an industry carrying meaningful commercial risk;
• expect the business to grow beyond a one-person operation.

Remaining a sole trader may still be sensible where the business is small, low-risk and the simplicity of sole-trader administration outweighs the benefits of incorporation.

The decision should be based on your expected numbers and circumstances rather than the assumption that an Ltd company automatically saves tax.

Who Can Set Up a Limited Company in the UK?

You normally need at least:

• one director;
• one shareholder for a company limited by shares;
• an appropriate registered office;
• a registered email address;
• a company name;
• at least one SIC code;
• details of the company’s shares and shareholders;
• information about people with significant control;
• articles of association;
• the required identity verification details.

One person can be the company’s sole director, sole shareholder and PSC.

A director must normally be at least 16. Directors do not have to live in the UK, although the company itself must maintain a registered office in the relevant UK jurisdiction.

A private limited company does not normally need a company secretary. Appointing one does not remove the directors’ own legal responsibilities.

Can a non-UK resident set up a limited company in the UK?

Yes. There is no general requirement for a director of a UK private limited company to live in the UK.

You still need a qualifying UK registered office address, however.

Non-resident owners should also distinguish between company formation, immigration rights and tax residence. Incorporating a UK company does not itself give anyone a right to live or work in the UK. Where directors manage a UK company from another country, additional UK and overseas tax-residence, permanent-establishment and double-taxation issues may also need consideration.

Limited Company Formation UK: What You Need Before You Register

Preparing the details first makes the incorporation application much easier.

1. Choose the company name

Your registered company name cannot normally be identical to an existing registered name and can also be challenged where it is considered too similar to another company or protected trade mark.

A private limited company’s name will normally end in Limited or Ltd. Companies registered in Wales may use the Welsh equivalents.

The name must not:

• be offensive;
• contain certain sensitive words without approval;
• falsely imply government or public-authority connections;
• breach another party’s trade mark rights.

Companies House maintains restrictions covering words such as those implying regulated, official or nationally significant status.

Before registering, check:

1. Companies House name availability;
2. UK trade marks;
3. relevant domain names;
4. social-media names;
5. whether the name still works if your business later expands.

Registering a name at Companies House does not automatically give you trade mark protection.

2. Decide who the directors will be

Every private limited company must have at least one director.

The director is responsible for managing the company and meeting legal duties. These include following the company’s constitution, keeping appropriate records, preparing annual accounts, dealing with tax and keeping Companies House information up to date.

Directors provide Companies House with personal information including a service address. Some information becomes publicly accessible.

3. Complete Companies House identity verification

Identity verification is now a legal part of the UK company regime.

For a new company, the incorporation application requires the Companies House personal code for each new director. A director receives this code after successfully verifying their identity.

Verification can generally be completed directly using GOV.UK One Login or through a registered Authorised Corporate Service Provider (ACSP), such as an eligible accountant, solicitor or formation agent.

For PSCs, separate verification obligations apply. A person who becomes a PSC after 18 November 2025 can provide their personal code when first added to the register or within the relevant 14-day period. A person who is both a director and PSC must comply with the requirements attached to both roles.

4. Decide who the shareholders are

Shareholders are the owners of a company limited by shares.

For a straightforward single-owner business, the director and shareholder are often the same person. For example, a company might issue one ordinary £1 share to the founder.

That simple structure is not appropriate for every business.

Before incorporating with multiple founders or investors, decide:

• what percentage each shareholder owns;
• how many shares will be issued;
• whether all shares carry the same voting rights;
• how dividends will be divided;
• what happens if a shareholder leaves;
• whether shares can be transferred;
• whether different share classes are required.

The company submits a statement of capital showing information about its shares and shareholders when it registers.

Poorly planned ownership arrangements can become expensive to change later, particularly once the company has acquired value.

5. Identify people with significant control

A person with significant control (PSC) is broadly someone who meets one or more statutory control tests.

This usually includes a person who:

• owns more than 25% of the company’s shares;
• controls more than 25% of its voting rights;
• can appoint or remove the majority of directors; or
• otherwise exercises significant influence or control.

Companies must identify and report their PSCs to Companies House.

For a one-person company where the sole shareholder owns 100% of the ordinary shares, that person will normally be a PSC.

6. Choose an appropriate registered office address

Every limited company must have a registered office.

It must be:

• a physical UK address;
• in the jurisdiction in which the company is registered;
• an address where company documents can reasonably be expected to come to the attention of someone acting for the company; and
• capable of acknowledging delivery.

A Royal Mail PO Box on its own cannot be used as the registered office.

For example, a company registered in Scotland must have its registered office in Scotland.

The registered office is publicly visible. If you run your business from home and do not want your home address published, arrange an appropriate registered-office service before incorporation. Accountants, solicitors and specialist address providers may offer this service.

7. Provide a registered email address

Companies House requires a registered email address.

The address is used for official communications and must be monitored, but it is not published on the public Companies House register.

Do not use an inbox that nobody regularly checks.

8. Choose the correct SIC code

A Standard Industrial Classification or SIC code tells Companies House what type of activity the business carries out.

You must provide at least one SIC code and can currently select up to four where the company has several activities.

Choose a code based on what the company actually does rather than the code that merely sounds closest to its brand name.

You can update the code later through the Confirmation Statement if the company’s activities change.

9. Prepare the memorandum and articles of association

The company’s constitutional documents include:

Memorandum of association: records the subscribers’ intention to form the company.

Articles of association: the internal rules governing how the company operates, including director and shareholder decision-making.

Straightforward companies often adopt the statutory model articles. Bespoke or amended articles may be better where there are:

• several founders;
• outside investors;
• multiple share classes;
• unusual voting rights;
• specific restrictions on share transfers.

Companies House accepts model, amended or bespoke articles depending on the formation route.

How to Set Up a Limited Company in the UK Step by Step

For a standard private company limited by shares, the process is:

Step 1: Confirm that a limited company is the right structure

Compare the tax, legal liability and administration against remaining a sole trader or using another structure.

Step 2: Finalise the ownership structure

Agree directors, shareholders, share numbers, share rights and PSCs before submitting the application.

Step 3: Verify each new director’s identity

Obtain each director’s Companies House personal code. Do this before beginning the final incorporation submission.

Step 4: Secure the registered office and email address

If using an accountant or address provider, ensure permission and service arrangements are in place first.

Step 5: Check the proposed company name

Check Companies House, trade marks and your commercial branding requirements.

Step 6: Select the SIC code or codes

Choose the codes that accurately represent the company’s intended activities.

Step 7: Choose the articles of association

Use model articles where appropriate or obtain professional advice if the ownership arrangement needs tailored provisions.

Step 8: Register the limited company with Companies House

You can register:

• directly through the Companies House/GOV.UK online service;
• through approved formation software;
• through a formation agent;
• through an accountant or solicitor;
• using a paper IN01 application where appropriate.

A standard digital incorporation currently costs £100 and is usually completed within 24 hours. A postal incorporation costs £124 and Companies House says paper applications typically take 8 to 10 days.

Step 9: Receive the Certificate of Incorporation

Once the application is accepted, Companies House issues a Certificate of Incorporation.

This confirms:

• the legal name of the company;
• its company registration number;
• the date of incorporation;
• that the company legally exists.

The company can then trade under its incorporated status.

How Much Does It Cost to Set Up a Limited Company?

The minimum official cost depends on the filing method.

Formation method	Companies House fee	Typical use
Standard online incorporation	£100	Most straightforward companies
Software incorporation	£100	Agents/accountants/software users
Same-day software incorporation	£156	Urgent eligible formations
Paper incorporation	£124	Applications that cannot or should not use the standard online service

Current Companies House fees took effect on 1 February 2026.

The Companies House fee is not necessarily the full setup cost.

You may additionally pay for:

• company formation advice;
• an accountant;
• a registered-office service;
• director service addresses;
• mail forwarding;
• bespoke articles;
• shareholder agreements;
• business banking;
• bookkeeping or accounting software;
• VAT or PAYE setup;
• regulated-sector licences.

Register a Limited Company Yourself or Use an Accountant/Formation Agent?

Both approaches can work.

Issue	Direct Companies House registration	Formation agent/accountant
Companies House fee	£100 digital	£100 digital fee plus provider charges
Best for	Straightforward single-owner companies	More complex ownership or owners wanting support
Company name and basic details	You prepare them	Provider can review them
Share structure	You decide	Professional input may be available
Registered office	You arrange it	Often available as an additional service
Identity verification	Complete yourself	An ACSP may be able to verify identity
Corporation Tax/VAT/PAYE setup	You handle relevant steps	Often included or available
Ongoing accounts	Separate task	Can usually be incorporated into an accountancy package
Responsibility	Director remains responsible	Director still remains legally responsible

When direct limited company formation is usually enough

Direct registration may be appropriate where:

• there is one owner;
• there is one ordinary share class;
• model articles are suitable;
• there is no investor arrangement;
• the director understands the filing responsibilities.

When professional formation advice is worth considering

Get advice before registering where:

• there are several founders;
• spouses or family members will hold shares;
• different dividend or voting rights are intended;
• investors will join the business;
• an existing sole-trader business is being transferred into the company;
• significant assets, goodwill or property are involved;
• directors are based overseas;
• the business is regulated;
• you are unsure how salary, dividends or pensions will work.

The most expensive incorporation mistake is rarely the Companies House fee. It is usually choosing the wrong ownership or tax structure and having to repair it afterwards.

What Happens After Registering a Limited Company?

Receiving the incorporation certificate does not complete the setup.

Open a dedicated company bank account

A limited company’s money is not the director’s personal money.

Use an account in the company’s name and route business income and expenditure through it. This makes bookkeeping, tax reporting and cash-flow control significantly clearer.

UK business guidance treats limited-company finances as separate from the owners’ personal finances and recommends an appropriate business account for that purpose.

Do not simply transfer company cash to yourself whenever you want it. Payments to directors and shareholders need to be properly categorised.

Set up bookkeeping immediately

Record transactions from the first day.

Your system should capture, as relevant:

• customer invoices;
• supplier bills;
• receipts;
• bank transactions;
• expenses paid personally for the company;
• director transactions;
• payroll;
• VAT;
• fixed assets;
• loans;
• dividends.

Starting bookkeeping at the year end creates unnecessary work and makes tax mistakes much more likely.

Add Corporation Tax to the company’s HMRC account

When you use the standard GOV.UK company-registration service, the company will usually be set up for Corporation Tax at the same time unless it is dormant. HMRC issues a 10-digit Unique Taxpayer Reference (UTR) for the company.

If the company becomes active, HMRC must be told within three months of the start of the Corporation Tax accounting period where notification is required. Activities indicating that a company is active include trading, providing services and receiving business income.

Keep the company’s UTR secure. It is different from a director’s personal UTR.

Register for PAYE if the company will pay salaries

If you employ staff or pay yourself a director’s salary requiring payroll reporting, the company may need a PAYE scheme.

The GOV.UK incorporation process can also be used to register for PAYE in relevant cases.

Running payroll means dealing with Real Time Information submissions, Income Tax and National Insurance where applicable. Do not assume that being a director automatically means salary can be paid without payroll.

Check whether VAT registration is required

A UK-established business generally needs to register for VAT where its VAT-taxable turnover:

• exceeds £90,000 over the previous 12 months; or
• is expected to exceed £90,000 within the next 30 days.

Voluntary registration below the threshold is also possible.

The £90,000 test is based on taxable turnover, not profit.

For example, a consultancy with £95,000 of taxable fees and £60,000 of expenses cannot avoid registration by arguing that its profit is only £35,000.

Different rules can apply to businesses established outside the UK and to certain international transactions.

Corporation Tax for a Limited Company in 2026

Corporation Tax is charged on taxable company profits rather than turnover.

For the financial year beginning 1 April 2026:

• profits at or below the relevant £50,000 lower threshold can qualify for the 19% small profits rate;
• profits above the relevant £250,000 upper threshold are generally taxed at the 25% main rate;
• qualifying profits between the limits can receive Marginal Relief, producing a gradual increase in the effective rate.

These thresholds can be reduced for:

• accounting periods shorter than 12 months; and
• companies with associated companies.

For example, where a company has three associated companies, the £50,000 and £250,000 limits are divided by four.

That is one reason owners of several companies should not automatically apply the headline £50,000 and £250,000 thresholds to each company independently.

How Can You Take Money Out of a Limited Company?

Company money belongs to the company.

A director/shareholder typically receives value through one or more of the following.

Director’s salary

Salary normally runs through PAYE and may create Income Tax and National Insurance liabilities.

The most appropriate salary depends on factors such as:

• other personal income;
• National Insurance thresholds;
• whether there are other employees;
• Employment Allowance eligibility;
• pension planning;
• available company profits.

Do not rely on an old article quoting a supposedly universal “tax-efficient director salary”. Relevant rates and circumstances change.

Dividends

A company can pay dividends to shareholders only when sufficient distributable profits are available.

Dividends are not a Corporation Tax-deductible business expense. They are paid from profits after Corporation Tax.

For the 2026/27 tax year, the Dividend Allowance is £500. Dividend income above available allowances is currently taxed at:

• 10.75% at the ordinary/basic dividend rate;
• 35.75% at the upper/higher dividend rate;
• 39.35% at the additional dividend rate.

The company’s records should properly document dividend decisions and payments.

Reimbursement of business expenses

Where a director personally pays a genuine company expense, the company can normally reimburse the amount subject to the relevant tax and expense rules.

Keep supporting evidence.

Pension contributions

Employer pension contributions can form part of an owner-director’s remuneration strategy where the conditions for tax relief are satisfied.

Director’s loan account

Money taken from the company that is not salary, dividend, expense reimbursement or another properly classified payment may create a director’s loan.

Director’s loan tax rules can be expensive when balances remain outstanding, so unexplained personal withdrawals from the business account should be avoided.

Tax Efficiency: Is a Limited Company Still Worth It?

Potential tax efficiency remains one reason businesses incorporate, but the answer is more nuanced than simply comparing the 19% Corporation Tax rate with personal Income Tax.

The actual outcome can involve:

1. Corporation Tax on company profit;
2. employer National Insurance on relevant salary;
3. employee Income Tax/National Insurance where relevant;
4. dividend tax when profits are distributed;
5. pension contributions and other reliefs;
6. the amount of profit retained inside the company rather than withdrawn.

With dividend rates of 10.75%, 35.75% and 39.35% in 2026/27, incorporation should not be sold as an automatic tax-saving exercise.

A limited company can still be attractive where profits are retained for growth, commercial liability matters, pension funding is relevant, ownership will be shared or the business needs a corporate structure. But the figures should be modelled based on the owner’s actual circumstances.

Important IR35 Point for Contractors Setting Up an Ltd Company

Creating a personal service company does not automatically put a contractor “outside IR35”.

The off-payroll working rules apply where the relationship would effectively have been one of employment if the individual had contracted directly with the client.

For public-sector and most medium or large private-sector engagements, the client generally determines employment status for the off-payroll rules.

Where services are provided to a small private-sector client, responsibility for considering the rules generally remains with the contractor’s intermediary.

IR35 is assessed by reference to the contract and actual working arrangements. Merely registering a limited company does not change the underlying employment-status facts.

Limited Company Accounting and Record-Keeping Requirements

Every company must maintain adequate accounting records, including records showing money received and spent and the company’s assets and liabilities.

For practical tax and accounting purposes, retain evidence including:

• bank statements;
• sales invoices;
• supplier invoices;
• expense receipts;
• payroll records;
• dividend documentation;
• VAT records;
• loan agreements;
• fixed-asset purchases;
• contracts and other supporting records.

There are different retention rules for different purposes.

Under Companies Act accounting-record requirements, a private company generally retains its accounting records for at least three years from the date they are made. HMRC Corporation Tax record-retention rules normally require relevant tax records for six years from the end of the accounting period, and potentially longer where an enquiry remains open.

In practice, businesses should therefore design their document-retention policy around the longer applicable tax requirement rather than deleting documents after three years automatically.

Annual Filing Requirements After Setting Up a Limited Company

There are separate filing and payment obligations for Companies House and HM Revenue & Customs.

They should not be treated as the same deadline.

Obligation	Normal deadline
First Companies House accounts	21 months after incorporation
Later Companies House annual accounts	9 months after financial year end
Corporation Tax payment	9 months and 1 day after Corporation Tax accounting period end
Company Tax Return	12 months after Corporation Tax accounting period end
Confirmation Statement	At least every 12 months, with filing allowed up to 14 days after the review period ends

The statutory accounts and Corporation Tax deadlines are confirmed in current GOV.UK guidance.

First-year accounts can create two Company Tax Returns

A common new-company trap is assuming that one set of first statutory accounts always means one CT600.

A company’s first Companies House accounts often cover slightly more than 12 months. A Corporation Tax accounting period cannot exceed 12 months, so the company may need two Company Tax Returns and two Corporation Tax payment deadlines for its first set of accounts.

This is particularly important where a company begins trading immediately after incorporation.

Filing Your Company Tax Return: Important 2026 Digital Change

The old HMRC/Companies House joint online service for filing company accounts and a Company Tax Return closed on 31 March 2026.

From 1 April 2026, companies generally need to use commercial software to file their Company Tax Return with HMRC. Paper Company Tax Returns are allowed only in limited circumstances, such as where there is a reasonable excuse or the return is filed in Welsh.

Commercial Corporation Tax software normally needs to handle:

• the CT600;
• the Corporation Tax computation;
• company accounts;
• the required iXBRL tagging.

Do not confuse this HMRC requirement with Companies House’s separate accounts-filing timetable.

Companies House has announced that all companies will be required to file annual accounts through commercial software from 1 April 2028. Until then, eligible Companies House accounts can still be filed through the filing routes currently available for that accounts type.

Confirmation Statement: What New Companies Need to Know

Every company, including a dormant company, must file a Confirmation Statement at least once every 12 months.

The statement confirms that Companies House holds accurate information about the company. Companies must also confirm that their intended future activities are lawful.

The current fee is:

• £50 online/software;
• £110 by paper form.

You pay the annual Confirmation Statement fee with the first statement filed within each 12-month payment period.

The Confirmation Statement can be used to confirm or update certain information, including aspects of:

• SIC codes;
• share capital;
• shareholder information;
• trading status of shares.

Other changes, such as a change of registered office or director information, generally need to be reported separately rather than waiting for the next Confirmation Statement.

The identity-verification regime also means Companies House will not accept a company’s relevant Confirmation Statement until required director verification has been completed.

What Happens If You Miss Limited Company Filing Deadlines?

Late compliance can become expensive.

Companies House accounts penalties

For private limited companies, current automatic late-filing penalties are:

How late the accounts are	Penalty
Up to 1 month	£150
More than 1 month up to 3 months	£375
More than 3 months up to 6 months	£750
More than 6 months	£1,500

The penalty normally doubles where accounts are filed late in two successive financial years.

Company Tax Return penalties

For Company Tax Returns with filing dates on or after 1 April 2026, HMRC increased the initial flat-rate penalties.

A return that is late can trigger a £200 penalty, with a further £200 when it becomes more than three months late. Further tax-geared penalties can arise after six and 12 months, and higher fixed penalties apply to repeated consecutive failures.

Late payment of tax can also create interest and other consequences separately from the return-filing penalty.

Common Mistakes When Setting Up a Limited Company

Choosing a limited company only because somebody said it saves tax

Run the numbers first. Tax is only one factor.

Using your home as the registered office without considering privacy

The registered office appears publicly. Arrange an alternative before incorporation if privacy matters.

Issuing shares without thinking about future ownership

A 50/50 company can create deadlock. Different share classes can have major legal and tax consequences. Agree the structure before registering.

Ignoring PSC requirements

Ownership and control are reportable, and PSC identity verification is now part of the compliance regime.

Picking a vague or inaccurate SIC code

Use the closest code to what the business actually does and update it when the activity changes.

Mixing personal and company money

The company is separate from you. Record salary, dividends, expenses and loans correctly.

Taking dividends before checking available profit

Cash in the bank does not automatically equal distributable profit.

Forgetting VAT because profits are below £90,000

The VAT test is based on taxable turnover, not profits.

Assuming Companies House and HMRC deadlines are the same

They are not. Keep a separate compliance calendar.

Assuming an accountant becomes legally responsible for the company

An accountant can prepare and file documents, but directors remain responsible for meeting their statutory duties.

Waiting until the year end to organise bookkeeping

Real-time bookkeeping gives directors a much clearer view of Corporation Tax, VAT, dividends and cash flow.

Setting Up a Ltd Company Checklist

Before you submit the incorporation:

• Confirm a limited company is the right structure.
• Choose the company name.
• Check Companies House name availability.
• Check relevant trade marks.
• Decide the directors.
• Complete director identity verification.
• Decide the shareholders.
• Decide the number, value and rights of shares.
• Identify PSCs.
• Arrange an appropriate registered office.
• Choose a registered email.
• Select the SIC code or codes.
• Decide whether model articles are suitable.
• Prepare any shareholder agreement needed.
• Submit the incorporation.
• Save the Certificate of Incorporation and company number.
• Secure the Companies House authentication information and personal codes.
• Open the company bank account.
• Set up bookkeeping.
• Add Corporation Tax services and check the company’s UTR.
• Tell HMRC when the company becomes active where required.
• Register PAYE where required.
• Review VAT registration.
• Record Companies House and HMRC deadlines.
• Review insurance, licences and sector-specific obligations.

FAQs About Setting Up a Limited Company

How do I set up a limited company in the UK?

Choose the company name, directors, shareholders and share structure; identify PSCs; arrange a qualifying registered office and registered email; select SIC codes; complete director identity verification; choose the articles; and submit an incorporation application to Companies House.

For a straightforward company limited by shares, the standard online Companies House service costs £100.

How much is limited company formation in the UK?

The standard official digital incorporation fee is £100. Paper incorporation currently costs £124. Professional formation services, registered addresses and accounting support cost extra.

How long does it take to register a limited company?

Companies House says standard online applications are usually registered within 24 hours, although complex applications can take longer. Postal applications typically take 8 to 10 days.

Can I register a limited company myself?

Yes. A straightforward private company can be registered directly through GOV.UK/Companies House.

Professional advice becomes more valuable where the company has several shareholders, multiple share classes, overseas directors, investors, an existing business being transferred into the company or unusual tax requirements.

Do I need an accountant to set up a limited company?

There is no general rule requiring a standard private limited company to appoint an accountant simply to incorporate.

However, company accounting and tax obligations are more complex than sole-trader reporting, and from 1 April 2026 Company Tax Returns generally require compatible commercial filing software.

Can I set up a limited company with one person?

Yes. One individual can normally be the sole director and sole shareholder and may also be the company’s PSC.

Do directors have to live in the UK?

No. Directors of a UK private limited company do not generally have to live in the UK. The company must still maintain a qualifying UK registered office.

Can I use my home address to register a limited company?

Yes, provided it meets Companies House’s registered-office requirements.

However, the registered office is public. If you want to keep your home address private, arrange another qualifying address before incorporating.

Do I need a business bank account after opening a limited company?

A limited company’s finances must be kept separate from those of its owners. In practice, an account held for the company’s business transactions is therefore a core part of operating the company properly.

It also makes bookkeeping, tax calculations and evidence of company transactions much clearer.

When does a new limited company pay Corporation Tax?

For most small companies, Corporation Tax is normally due nine months and one day after the end of the relevant Corporation Tax accounting period. The Company Tax Return itself is normally due 12 months after the accounting period ends.

What Corporation Tax rate will my limited company pay?

For 2026, the standard small profits rate is 19% for qualifying profits at or below £50,000 and the main rate is 25% for profits above £250,000, with Marginal Relief potentially applying between those limits.

The limits may be reduced for short accounting periods and associated companies.

When must a limited company register for VAT?

For a UK-established company, compulsory registration generally applies where VAT-taxable turnover exceeds £90,000 in a rolling 12-month period, or where you expect turnover to exceed £90,000 within the next 30 days.

Voluntary VAT registration below the threshold is possible.

Can I change from sole trader to limited company?

Yes. Many businesses start as sole traders and incorporate later.

However, transferring an existing business can involve more than simply registering a company. Assets, contracts, stock, employees, VAT registrations, goodwill, bank arrangements and tax positions may need to be transferred correctly.

Where the existing business has meaningful value, take advice before making the transfer.

Is setting up a limited company better for contractors?

It can be appropriate, but incorporation does not override the off-payroll working rules.

Contractors should consider IR35, client requirements, professional indemnity insurance, VAT, salary/dividend planning and the added administration before deciding.

Getting the Limited Company Set Up Right from Day One

Registering a limited company is relatively quick, but choosing the right ownership structure, tax setup and accounting processes from the start can prevent costly problems later.

Before incorporation, decide who should own the company, how the shares should be structured, which registered office to use, whether the model articles are suitable and how directors and shareholders will take money from the business. Once the company is formed, put bookkeeping, Corporation Tax, payroll, VAT and Companies House compliance processes in place immediately rather than waiting for the first filing deadline.

For a straightforward one-director company, registering directly with Companies House may be sufficient. However, if your business has multiple shareholders, higher profits, overseas connections, IR35 considerations or more complex salary and dividend planning, professional advice can be valuable.

At AccFirm, our limited company accountants support company directors with everything from initial setup and Corporation Tax registration to annual accounts, VAT, payroll, bookkeeping and ongoing tax planning. Getting professional support early can help you remain compliant, avoid unnecessary tax mistakes and build a financial structure that supports the company as it grows.