Setting up a limited company separates your personal assets from business debts. It can also be more tax efficient than sole trading once your income is higher. This guide explains what you need, how to register, and what it costs.
What do you need before you register a limited company?
You need a company name, a UK registered office address, and at least one director. You also need to name your shareholders and identify any persons of significant control. Anyone who owns more than 25% of the shares or voting rights is a PSC. Companies House must register every PSC.
Get these details ready before you start.
Company name. Your name must end in “Limited” or “Ltd”. It cannot match a name already on the Companies House register. Check availability before you apply. No two companies can share the same name.
Registered office address. This must be a real UK address. HMRC and Companies House use it to send official correspondence. You can use a professional service address or a virtual office. It is publicly visible on the Companies House register.
Directors. You need at least one. They must be 16 or older. You can be the sole director and sole shareholder. This is common for freelancers and contractors.
Shareholders. At least one shareholder is required. A director and a shareholder can be the same person. You will need to state each shareholder’s name, address, and share count.
Persons of significant control. Anyone with more than 25% of shares or voting rights is a PSC. If you own the whole company, that is you. Their details are publicly visible on the Companies House register.
SIC code. You choose a Standard Industrial Classification code during registration. It tells Companies House what industry your business operates in. Check the Companies House SIC list before you apply.
Company documents. You will need a memorandum of association and articles of association. Both are generated automatically when you register online. The memorandum confirms the shareholders’ intention to form the company. The articles set the rules for how the company runs.
See GOV.UK’s guidance on setting up a limited company for the full picture.
How do you register a limited company with Companies House?
You register online through Companies House WebFiling. Confirm your directors, shareholders, and persons of significant control. Submit your company documents and pay the fee. Companies House issues a certificate of incorporation once it is approved. Most applications complete within 24 hours.
The online route is the quickest. The steps are below:
- Verify your identity. Companies House now requires identity verification before you register. Directors must verify through GOV.UK One Login. You will receive a personal code to enter during the application.
- Create a Government Gateway account. Set this up for your company, not your personal account. This gives you access to Companies House WebFiling.
- Complete the application. Enter your company name, registered address, and SIC code. Add details for all directors, shareholders, and PSCs.
- Submit your documents. Articles of association are generated automatically. You can customise them if you want bespoke rules.
- Pay the £100 fee. Pay by debit or credit card. Your application is submitted straight away.
- Receive your certificate. Your certificate of incorporation arrives by email. This is your proof of registration.
You can also register your company by post. Postal applications cost £124 and take 8 to 10 days.
After registration, set up Corporation Tax through your HMRC business tax account. HMRC will not do it automatically.
How much does it cost to set up a limited company?
Online registration through Companies House costs £100. Pay by debit or credit card. Your company is usually live within 24 hours. Postal applications cost £124 and take 8 to 10 days. Formation agents charge their own fee on top of these costs.
The £100 online fee is the only mandatory registration cost. See the Companies House registration guidance for the current fee schedule.
Once registered, you will also have ongoing annual obligations. Per GOV.UK’s guidance on annual accounts and tax returns, the key deadlines are:
- Annual accounts: filed with Companies House within 9 months of your financial year end
- Company Tax Return: filed with HMRC within 12 months of your accounting period end
- Corporation Tax payment: due 9 months and 1 day after your accounting period ends
- Confirmation statement: a short annual update filed with Companies House once a year
Most directors pay an accountant to prepare their accounts and tax return. Fees vary based on the complexity of your finances.
Is it a good idea to set up a limited company?
It depends on your income and risk profile. Limited companies protect your personal assets from business debts. They are often more tax efficient for directors earning over £30,000. But the trade-off is more admin each year. You will file annual accounts, a corporation tax return, and a confirmation statement.
Personal liability. If the company owes money, your personal savings and home are protected. That is not the case as a sole trader. The protection only disappears if you have personally guaranteed a business debt.
Tax efficiency. Directors can draw income as a mix of salary and dividends. Dividends are not subject to National Insurance contributions. This is often more efficient than self-employed income at the same level. Speak to an accountant to check whether the savings justify the extra admin.
Admin and compliance. You will file annual accounts and a corporation tax return every year. Directors who draw a salary must also file self assessment tax returns personally. There is more to manage than sole trading, but professional support makes it manageable.
Who it suits. A limited company works well for contractors, consultants, and freelancers earning over £30,000 to £40,000. It also makes sense for anyone with significant business liabilities. At lower income levels, the extra admin may cost more than the tax saving.
Do you need an accountant to register a limited company?
No, you can register yourself online. It takes under an hour with your details ready. But most directors use an accountant for ongoing compliance work. Annual accounts, corporation tax returns, and VAT returns are where professional support makes the real difference.
The registration is designed to be self-serve. Most people can complete it without professional help.
After registration, your ongoing compliance duties include:
- Annual accounts: prepared and filed with Companies House within 9 months of your financial year end
- Company Tax Return: filed with HMRC within 12 months of your accounting period end
- Corporation Tax payment: due 9 months and 1 day after your accounting period ends
- Confirmation statement: a short annual update filed with Companies House
- VAT returns: quarterly, if your turnover reaches £90,000
- Payroll: required if you pay yourself a salary or employ anyone
Review your responsibilities as a limited company director on GOV.UK.
Our limited company registration service handles the setup from day one. You will also be connected to our compliance team for everything that comes after.
Need help registering your company? DASA’s company registration service covers the setup and connects you to ongoing accountancy support.
This article is a general guide to setting up a limited company in the UK. Tax rules and Companies House fees can change. Speak to a qualified accountant before making decisions about your business structure.