Set Up a Limited Company – Complete UK Guide & Costs 2025

Registering a limited company in the UK creates a separate legal entity that protects personal assets and can offer tax advantages. The process involves choosing a company structure, submitting documents to Companies House, and registering for Corporation Tax. This guide covers the costs, steps, documents, and obligations for 2025 based on official sources.

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

Key insights

• The most cost‑effective way is via Companies House online service at £100. Third‑party agents often add fees for extra speed or services.
• Company name must be unique, not offensive, and not too similar to an existing registered name. Avoid sensitive words unless permission obtained.
• You must register for Corporation Tax within three months of starting any business activity – not just the incorporation date.
• A registered office address must be a physical location in the UK (not a PO Box) where official documents can be served.
• Since 2006, private limited companies are not required to have a company secretary unless specified in the articles.
• Non‑UK residents can form a UK limited company, but a UK registered address is needed and additional ID checks may apply.

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

The primary cost is the Companies House registration fee. Online incorporation costs £100, while postal registration using form IN01 costs £124. Same‑day online registration is also available, with higher fee options depending on the submission method.

What is the cheapest way to set up a limited company?

Using the Companies House online service (£100) is the cheapest direct method. Some formation agents offer packages that include the statutory fee and may charge little or nothing extra – but always check what is covered. Hidden costs can arise if you later need a professional registered office or director service address.

Are there any hidden fees after registration?

Ongoing costs include the annual confirmation statement fee (£34 if filed online) and accounting or bookkeeping services. Many directors also pay for registered office address services, business bank accounts, and tax software. First‑year all‑in costs can range from around £100 for a DIY setup to £2,000+ when using agents, accountants, and premium services.

What Documents and Information Do You Need to Register a Limited Company?

Company name and registered office

Your proposed company name must be unique and not too similar to an existing registered name. You can check availability using the Companies House company name search. The registered office must be a physical address in the UK (England & Wales, Scotland, or Northern Ireland) where official documents can be served.

SIC code and business activity

A Standard Industrial Classification (SIC) code is a five‑digit number describing your main business activity. You choose it during incorporation. Common codes include IT consultancy, management consultancy, online retail, and software development.

Memorandum and articles of association

These constitutional documents confirm the intention to form the company and set out internal rules. Many small companies adopt model articles provided by Companies House unless they need customised governance.

Director and shareholder details

You need full names, dates of birth, service addresses, and residential addresses (held privately) for all directors and shareholders. A statement of capital (share classes, nominal value, total issued shares) and People with Significant Control (PSC) information are also required.

What Are the Tax and Legal Responsibilities After Setting Up a Limited Company?

Corporation Tax registration

Registration with HMRC must be completed within three months of starting any business activity – this can be before you begin trading. Corporation Tax applies to company profits, not turnover. Register for Corporation Tax via GOV.UK.

VAT and PAYE

If your taxable turnover exceeds £90,000 (2025 threshold), you must register for VAT. If you employ staff (including yourself via salary), you need to set up PAYE with HMRC.

Ongoing filing obligations

Companies must file a confirmation statement every 12 months (fee £34 if online) and annual accounts within 9 months of the accounting reference date. Directors are legally responsible for timely filings as outlined in GOV.UK director responsibilities.

Who Can Be a Director and Shareholder of a Limited Company?

Minimum requirements

You need at least one director, who must be aged 16 or older. There is no upper age limit. Directors manage the company and face legal duties: filing accounts, keeping company records, ensuring tax compliance, and acting in the company’s best interests.

Shareholders and shares

At least one shareholder is required. The same person can be both sole director and sole shareholder – a common structure for freelancers and small businesses. Shareholders own the company and receive dividends; they can vote on major decisions.

Company secretary – not mandatory

Since the Companies Act 2006, private limited companies are not required to appoint a company secretary. If you do appoint one, their role is defined in the articles.

What Happens After You Register a Limited Company? – Timeline

1. Choose company name, address, SIC code, and gather director/shareholder info – about 30 minutes to 1 day.
2. Register online with Companies House – 10–15 minutes.
3. Receive Certificate of Incorporation – within 24 hours (same day if before 3pm).
4. Register for Corporation Tax – within 3 months of starting to trade.
5. Set up a business bank account – a few days to a few weeks.
6. Register for VAT (if turnover > £90,000) or PAYE (if employing) – as needed.
7. File first confirmation statement – within 12 months of incorporation.

What Remains Unclear About Setting Up a Limited Company?

Why Does the UK Limited Company Structure Exist?

A private limited company offers liability protection by separating personal and business finances. It also provides professional credibility and can be more tax‑efficient than sole trading at higher profit levels. The structure is designed to be straightforward for most small businesses, but understanding the nuances – such as SIC codes and registered office requirements – is critical to avoid rejections.

What Do Official Sources Say About Setting Up a Limited Company?

“You can register your company online for £100. It usually takes 24 hours and you’ll receive your certificate of incorporation by email.”

— GOV.UK – Set up a limited company step by step

“Your company name must not be the same as an existing registered company name or too like it.”

— Companies House – Guidance on company names

“You must register for Corporation Tax within 3 months of starting to do business – this may be before you start trading.”

— HMRC – Register for Corporation Tax

In Summary: What Do You Need to Remember When You Set Up a Limited Company?

Forming a limited company in the UK is a structured process that takes as little as 24 hours for online registration at £100. Beyond incorporation, you must register for Corporation Tax, file annual accounts and a confirmation statement, and maintain accurate records. For non‑UK residents, a registered office address in the UK is essential. For more on related administrative processes, see UK Visas and Immigration and DVLA Renew Driving Licence.

Frequently Asked Questions