How to Set Up a Limited Company in the UK: 7 Steps
- Modified: 29 October 2026
- 9 min read
- Starting a Company
Melody Huang
Author
Melody Huang is a content specialist at Osome, focused on producing expert content that supports UK entrepreneurs. She breaks down complex business topics into accessible, step-by-step advice — from setting up a limited company to managing accounts and planning for long-term growth. Melody’s work makes the blog a go-to resource for businesses looking to thrive in the UK.
Kate Lokenbaha
Reviewer
Kate Lokenbaha is an Accounting Team Lead and reviewer at Osome, focused on verifying the accuracy and reliability of content related to accounting, bookkeeping, and financial reporting. With accounting expertise, she supports UK readers with clear, practical insights, helping them understand financial requirements and make informed business decisions with confidence.
Setting up a limited company in the UK creates a distinct legal entity. Limited liability applies to any unpaid amount on the shares, so fully paid shares do not put personal finances on the line by default. Companies House, HMRC, and the bank still each need different details on day one. This guide covers the filing steps, 2026 fees, and post-incorporation filings, so a founder can form the company and start on the right records.
Key Takeaways
- A UK limited company is its own legal entity; one individual may be the sole company director and shareholder.
- From 1 February 2026, online incorporation costs £ 100 and is usually completed within 24 hours; postal Form IN01 costs £ 124 and takes 8 to 10 days.
- After incorporation the company still needs Corporation Tax with HMRC, a business bank account, and later an annual confirmation statement plus accounts.
What Is a Limited Company?
A limited company is a UK company type that is legally separated from the owners. It can own assets, enter contracts, and owe debts. Shareholders' liability is usually limited to any amount still unpaid on their shares. Where the shares are fully paid, company finances do not reach personal assets by default.
Once it is on the Companies House register, it can hold property, employ people, and be sued without those claims automatically passing to the founders. Company directors manage day-to-day decisions; shareholders own the shares. Registration creates an entity that continues until the company is dissolved.
A limited company only becomes a separate legal entity once it is on the Companies House register. Until that filing lands, there is no company to hold a contract or ring-fence personal assets. Osome company registration services handle the application so you get that entity without running the filing yourself.
Why Set Up a Limited Company?
Founders set up a limited company to ring-fence personal liability, raise capital by issuing shares, and take on business partners. A sole trader and the business are the same person, so business debts can reach personal assets. Company profits are taxed as Corporation Tax. Founders do not pay income tax.
Limited status does not remove personal guarantees, late-filing penalties, or liability for insolvent trading. Confirmation statements and accounts still have to be filed after the certificate.
7 Steps to Setting Up a Limited Company
Setting up a limited company takes seven steps: company type, name, officers, addresses, documents, then submit and pay. That path is a company incorporation filing with Companies House. The bank account and tax registrations come after the certificate.
1 Choose the company type
There are two legal structures for limited company in the UK: a company limited by shares and a company limited by guarantee. Most businesses choosing a limited structure should form a company limited by shares. Shareholders own the company, profits can be retained or paid as dividends, and the ongoing rules are lighter than for a public company.
A company limited by guarantee is the better fit for a non-profit. It has members rather than shareholders, and each member is a guarantor rather than an owner of shares.
A public limited company is still limited by shares; it only makes sense where capital will come from a wide pool of owners and the extra officer and reporting rules are acceptable. A limited liability partnership is a different legal form, not a type of limited company.
2 Choose a company name
When choosing a company name, the registered name must not match a name already on the register, must not be offensive, and must not use a sensitive word without permission.
A private limited company name normally ends in Limited or Ltd. A trading name is optional.
Companies House does not reserve names. The only way to register a business name with Companies House is to incorporate, or to keep a formed company dormant. A name already on the company register cannot be reused.
A trade mark search still matters, because a clear Companies House name can clash with a registered mark.
3 Appoint directors, shareholders and PSCs
Limited company requirements include at least one director who is a natural person, aged 16 or over, and not disqualified or an undischarged bankrupt. A company limited by shares also needs at least one shareholder. More than one director is allowed. Company officers include the directors; a company secretary is optional for a private company. The same person may be sole director and sole shareholder.
Each person on the filing needs three personal identifiers, such as a National Insurance number, a passport number, or a town of birth.
A person with significant control (PSC) is anyone who owns or controls more than 25% of the shares or voting rights. From 18 November 2025, under the Economic Crime and Corporate Transparency Act, new directors and PSCs verify identity, receive a Companies House personal code, and supply that code during the incorporation process.
4 Register the office, service address and email
A UK limited company uses four contact details, not one address. The registered office, the director's service address, the residential address, and the registered email each sit on a different record.
Detail | Public? | What it is for |
|---|---|---|
| Registered office | Yes | Official company correspondence |
| Director service address | Yes | Public address for directors |
| Residential address | No | Private Companies House record |
| Registered email | No | Companies House contact |
Pick the jurisdiction first — England and Wales, Scotland, or Northern Ireland. The registered office address must be a physical address in that same jurisdiction. A PO Box is not allowed. Mail must be receivable there. A third-party office is allowed if it meets Companies House rules.
Each director still has to give both a director service address and a residential address. A registered email address has been required since 4 March 2024.
5 Prepare the documents
To submit an online application, first decide on the people, addresses, standard industrial classification (SIC) codes, and either minimum share capital or the guarantee amount first. Companies House generates the memorandum and applies model articles. A postal application also needs Form IN01 and any bespoke articles.
Prepare these registration documents first:
- Company details: type, registered name, officers, PSCs, registered office, service addresses, and registered email from steps 1 to 4.
- Memorandum of association: the subscribers' agreement to form the company. Companies House generates it on the online service.
- Articles of association: the internal rulebook. Model articles apply automatically online; draft bespoke articles first if extra share classes are needed.
- Share or guarantee statement and SIC codes: a company limited by shares has no minimum capital; one £ 1 share is enough. A company limited by guarantee files a guaranteed amount instead of shares. Up to four SIC codes describe the activity.
- Form IN01: only for a postal filing, including a name that will not use Limited or Ltd.
6 Submit the application and pay
Set up a limited company online, by post on Form IN01, or through a company formation agent. From 1 February 2026 the fee is £ 100 online or £ 124 by post. An agent remits that Companies House amount, then adds its own charge.
Route | Statutory fee | Typical time | Fits when |
|---|---|---|---|
| Companies House online | £ 100 | Usually within 24 hours | Standard private company, model articles |
| Companies House by post (IN01) | £ 124 | 8 to 10 days | Bespoke articles, or a name that will not use Limited or Ltd |
| Company formation agent or accountant | Agent fee plus the Companies House fee | Often similar to online | Founder wants checks, a registered office, or tax registrations bundled |
Register the company online when model articles apply, and pay £ 100 by debit or credit card. Postal IN01 is paid at £ 124. Each director's Companies House personal code from step 3 must be included, or the application will not complete.
The company's Government Gateway user ID is created during online registration. That login belongs to the company, not to the founder; a personal government Gateway user ID cannot be reused.
7 Receive the certificate
A limited company is formed when Companies House issues the certificate of incorporation. It shows the company number and the date of incorporation. That date cannot be backdated or future-dated. The certificate is the proof the company legally exists. A company that is not ready to start trading can stay dormant, but the legal start date does not move.
Trading in the company name can start once the certificate exists. Directors should keep a copy. For a private limited company, the certificate is the proof that the ltd company has been formed.
How Much Does It Cost to Set Up a Limited Company?
The cost to set up a limited company is the incorporation filing plus the later running costs. From 1 February 2026 the Companies House fee is £ 100 online or £ 124 by post. A registered-office service, ongoing accounting, and the yearly confirmation statement sit on top. A formation agent charges its own package as well as remitting the Companies House line.
Item | Amount | When it is paid |
|---|---|---|
| Companies House online incorporation | £ 100 | On filing |
| Companies House postal IN01 | £ 124 | On filing |
| Confirmation statement (online) | £ 50 | Each 12-month review period after incorporation |
| Confirmation statement (paper CS01) | £ 110 | If filed by post |
| VAT registration | £ 0 | If and when the VAT threshold is met |
| Accountant, registered office, or payroll software | No single published scale | Ongoing; agent and software prices vary |
The confirmation statement fee is a later 12-month cost, not part of the incorporation payment. VAT registration is free when the threshold is met. Agent and software prices have no single published scale.
For founders who intend to extract profit through dividends, a UK LTD can be especially attractive. The UK applies a 0% withholding tax on dividends, which allows overseas shareholders to receive distributions more efficiently. Overseas shareholders may still need to pay taxes on those dividends in the country where they live. Dividend income is paid after the company has paid Corporation Tax on profits.
Accounting Team Lead
How Long Does Incorporation Take?
Filing a unique company online is usually processed within 24 hours. Postal IN01 applications take 8 to 10 days. Same-hour approval is not a published rule, so a clean file remains the fastest path for a standard application.
What adds days is:
- Name: too similar or uses a sensitive word.
- Identity check: has not produced a personal code.
- Companies House query: from the registrar.
Name clashes, missing personal codes, and registrar queries add days on top of the usual 24-hour or 8-to-10-day window, not instead of it. The date on the certificate is the legal start date even if the founder delays trading. Postal packs also include delivery time to the registrar.
What Happens After Incorporation?
After incorporation, a company that will trade publicly needs a business bank account, Corporation Tax, and PAYE if anyone is paid a salary. If it will stay dormant, the live jobs are the confirmation statement and dormant accounts.
A practical day-one order after the certificate arrives is:
- Store the company number.
- Open a business bank account in the company's name.
- Confirm Corporation Tax if the company will trade.
- Diary the confirmation statement; register for PAYE only if paying a salary.
Issue share certificates (not filed at Companies House) and minute the first director decisions.
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Business bank account
A UK bank account is not a Companies House filing, so a limited company can be formed without one. Until a business account in the company's name is open, the company should not start taking receipts or making payments, so personal and company funds stay unmixed.
Banks typically ask for the certificate and company number, plus officer identification. The process is slower than a personal account, so the application should start once the certificate exists if the company will trade. Allow extra days for the bank's own identity checks.
Corporation Tax and Government Gateway
An online incorporation usually sets the company up for Corporation Tax at the same time, unless the company is dormant. If it was not activated, add Corporation Tax to the business tax account when the company starts doing business. HMRC treats that as including buying, selling, advertising, renting property, and employing someone. Corporation Tax registration is required within three months of trading.
The company number and 10-digit Unique Taxpayer Reference (UTR) are needed. Payment is generally due nine months and one day after the accounting period ends. The Company Tax Return is due 12 months after that period.
PAYE and VAT
PAYE registration is required before the first payday, including where the only employee is the director taking a salary. The company must not pay salaries until that registration is in place. VAT is not a day-one filing for most companies.
VAT becomes compulsory when taxable turnover in the last 12 months goes over £ 90,000, or when taxable turnover in the next 30 days alone is expected to go over £ 90,000. Workplace pension auto-enrolment applies only once there are eligible staff; a sole director with no other staff may use the Pensions Regulator exception.
Confirmation statement and annual accounts
A confirmation statement is the yearly filing that confirms Companies House still holds the right details. Every company, including a dormant one, must file a confirmation statement in each 12-month review period, up to 14 days after that period ends.
Companies House will not accept the statement until each director's personal code is linked to that role. Statutory accounts are generally due nine months after the accounting reference date. First accounts covering more than 12 months are due 21 months from incorporation, or three months from that date if later. Directors still keep statutory registers of members, directors, and PSCs with the company, not at Companies House.
How Osome Can Help
Getting a limited company registered is a paperwork problem as much as a legal one. A rejected name or an address Companies House will not accept can stall the first filing.
If you are a UK founder or an overseas entrepreneur forming a private limited company, Osome company incorporation plans cover the Companies House filing, a registered office, and the first officer details in one pass. Bookkeeping, the confirmation statement, and administrative responsibilities then sit on the same calendar.
Summary
Treat the certificate of incorporation as the start of a filing calendar, not the end of setup. Late accounts penalties start from that first year end even when no invoices went out. You must register for Corporation Tax within three months of trading if the company was not enrolled when it was formed.
If you form the company and then pause, keep the confirmation statement and dormant accounts on the diary. The filings follow the company, not the founder's sense that trading has not begun.
Melody Huang is a content specialist at Osome, focused on producing expert content that supports UK entrepreneurs. She breaks down complex business topics into accessible, step-by-step advice — from setting up a limited company to managing accounts and planning for long-term growth. Melody’s work makes the blog a go-to resource for businesses looking to thrive in the UK.
