Starting a Limited Company in the UK — Complete Guide

Registering a limited company in the UK is one of the most straightforward processes in the world. The entire thing can be done online in under an hour and costs just £12. But there are decisions you need to make before you click submit, and obligations that kick in the moment your company is live.

Why Choose a Limited Company?

A limited company is a separate legal entity from its owners. This means your personal assets — your house, car, savings — are protected if the business fails. You only stand to lose what you have invested in the company. This is the single biggest reason most UK entrepreneurs choose to incorporate rather than trade as a sole trader.

There are also tax advantages. Limited companies pay Corporation Tax on profits (currently 19-25% depending on profit level), whereas sole traders pay Income Tax and National Insurance which can reach 45% plus NICs at higher earnings. Use the CalcPad tax calculator to compare.

What You Need Before Registering

Before you go to Companies House, gather the following:

• Company name — must be unique on the Companies House register. Search existing names on BizLookup first.
• Registered office address — a UK address that will be publicly visible. Many directors use a virtual office service. See our registered office guide.
• At least one director — must be 16 or over. Read about director responsibilities.
• At least one shareholder — can be the same person as the director.
• SIC code — a 5-digit code describing your business activity. See our SIC codes guide.
• Articles of Association — most companies use the standard Model Articles.

Step-by-Step Registration

1. Go to gov.uk/set-up-limited-company and create a Government Gateway account.
2. Enter your proposed company name. Companies House checks it against existing names in real time.
3. Provide your registered office address, director details and shareholder information.
4. Select your SIC code(s) — you can choose up to four.
5. Choose whether to adopt Model Articles or upload custom articles.
6. Pay the £12 fee by debit card, credit card or PayPal.
7. Submit. Most applications are approved within 24 hours. You receive a Certificate of Incorporation with your company number.

Immediately After Incorporation

Once your company is registered, several clocks start ticking:

• Corporation Tax registration — register with HMRC within 3 months. See our Corporation Tax guide.
• Annual accounts — first accounts due within 21 months. See our accounts guide.
• Confirmation statement — due within 12 months. Read our confirmation statement guide.
• VAT registration — required if turnover exceeds £90,000. See our VAT guide.
• Business bank account — separate finances immediately. See our bank account guide.

Common Mistakes to Avoid

• Using your home address as the registered office without realising it becomes permanently public.
• Forgetting to register for Corporation Tax and receiving a penalty from HMRC.
• Not keeping personal and company finances separate, which can undermine limited liability.
• Choosing a company name that conflicts with an existing trademark.

Costs Summary

• Companies House registration: £12 (online) or £40 (paper)
• Same-day registration: £30 (online only)
• Registered office service: £50-150/year (optional)
• Accountant: £500-2,000/year (recommended)

For a full breakdown, try the CalcPad business calculators.