How to set up a limited company, step by step.

Before you start: is a limited company right for you?

A limited company separates the business from you personally. That brings limited liability, a more formal image and flexibility in how profits are taken, but also more administration: annual accounts, a confirmation statement, Corporation Tax returns and public records.

Sole trader status is simpler and may suit low-profit or early-stage work. Compare both before you commit, ideally with an accountant if your income is significant.

Step 1: choose and check your company name

Search the Companies House register. Names that are the same as an existing company are rejected; names too like another can be challenged later. Sensitive words such as 'Bank', 'Royal' or 'Chartered' need permission. The name must end in 'Limited' or 'Ltd' (or the Welsh equivalent).

Check trade marks and domain availability at the same time — registering a company name does not give you trade-mark rights.

Step 2: decide your addresses

Every company needs a registered office in its jurisdiction, and every director needs a service address. Both are public. If you use your home address it will appear on the register permanently, even after you change it.

Formation agents sell London or regional addresses to protect privacy. Check what post is forwarded, how often, and the renewal price after the first year.

Step 3: appoint directors and shareholders

You need at least one director, who must be a person aged 16 or over. One person can be the only director and the only shareholder. Directors take on legal duties — to act within the company's powers, promote its success and avoid conflicts of interest.

Record every person with significant control: broadly anyone with more than 25% of shares or votes, or the right to appoint most directors.

Step 4: set your share structure

Most single-founder companies issue a small number of £1 ordinary shares. With several founders, the split determines votes and dividends, so agree it in writing. Different share classes are possible but add complexity; model articles assume a single class.

• Number of shares and nominal value (for example 100 × £1)
• Who holds them and whether they are fully paid
• Any share classes and their rights
• Whether you need a shareholders' agreement as well as articles

Step 5: verify identity

Directors and people with significant control must verify their identity, either through GOV.UK One Login directly or through an authorised corporate service provider (ACSP). Many formation agents, including Rapid Formations and 1st Formations, advertise ID verification as an ACSP at no extra charge. Each verified person receives a personal code to use on filings.

Step 6: register the company

Submit online with Companies House for £100 or through a formation agent. Agents vary widely in what is included.

Worth knowing: Prices checked 14 October 2026. Tide is our featured partner and pays us commission.

Step 7: register for tax and open a bank account

After incorporation, HMRC sends a Unique Taxpayer Reference. Register for Corporation Tax within 3 months of starting to trade. Register for PAYE before paying any salary and consider VAT. Open a business account in the company's name and keep company money separate from personal money.

1. 1

   Register for Corporation Tax online

2. 2

   Set up PAYE if paying salary

3. 3

   Decide on VAT registration

4. 4

   Open a business bank account

5. 5

   Choose bookkeeping software or an accountant

Step 8: put your deadlines in the diary

Missing filings leads to automatic penalties.

Worth knowing: Our interactive tax and filing calendar estimates these dates from your incorporation date.