There are many reasons why you might want to set up a limited company in the UK. Perhaps you are looking to start a new business venture, or you have been operating as a sole trader or partnership and want to register as a limited company. Whatever your reasons, setting up a limited company is relatively straightforward – and we are here to help.

What is a limited company?

A limited company is a business structure in the United Kingdom that offers limited liability to its owners. A limited company can be either private or public. Public limited companies can sell shares openly to the public, whereas private limited companies cannot. Many entrepreneurs choose to set up a limited company for better liability protection and enhanced credibility in the UK market.

There are two subtypes of private limited company in the UK:

1) A company limited by shares: The most common type of private limited company, a company limited by shares, has shareholders who own the company.

2) A company limited by guarantee: This type of private limited company does not have shareholders. Instead, its members agree to pay a set amount of money if the company is wound up.

Company TypeKey Features
Limited by Shares• Owners are shareholders;
• Risk limited to amount invested;
• Shares can be issued.
Limited by Guarantee• Owned by members;
• No share issuance;
• Common in non-profits and charities.

Under most circumstances, we see the private company limited by shares as the default choice for small and medium-sized ventures in the UK. This structure limits the liability of shareholders to the amount they have invested in the company. Generally, these companies do not offer shares for sale to the public.

Limited companies are registered with Companies House, which is the UK’s registrar of companies. The best way to start a company is through a company formation agency like Uniwide Formations.

Key Considerations Before Company Setup

We encourage prospective owners to clarify their goals and resources before finalising a company formation plan. Examining factors such as ownership structure, potential investors, and long-term viability helps build confidence in your approach. You must also identify your budget for initial setup, professional fees, and any overhead costs related to trading.

Using a Company Formation Agent

A company may be formed by submitting an application directly to Companies House or by using a company formation agent, like Uniwide Formations. The agent approach offers several advantages, particularly if you are a first-time company director. Agents provide guidance and support throughout the process. They verify that all documents are in order, helping prevent errors and rejections from Companies House.

Many agents offer package deals that include everything you need to set up your company. These packages often cover a registered office address, advice on VAT registration, and guidance on opening a business bank account.

Important Factors to Consider When Setting Up a Limited Company

Among the key things to decide when setting up a limited company are its business activities, registered office, and company officers:

  • Nature of the Business: Determine if you sell goods, offer services, or operate digitally. This affects your tax and reporting obligations.
  • Official Registered Office: A local address in the UK is essential. Some directors use their home address, but it becomes public, so weigh privacy concerns.
  • Company Officers: There must be at least one director who is 16 years or older and capable of fulfilling statutory duties. Having multiple directors can help share responsibilities.

Planning for yearly filings and potential changes in directorship or ownership remains vital. New legislative measures often appear, so stay informed by checking the official GOV.UK guidance for limited companies. This proactive approach allows you to adapt quickly and maintain alignment with your growth objectives.

Statistics and Data on UK Limited Companies

If you plan to set up a limited company, you will join many British businesses. Companies House data shows that, as of September 2024, there were over 5.4 million registered companies in the UK. The “active” subset, excluding dissolving or liquidating firms, reached 4.9 million in the same month.

Micro-enterprises (0–9 employees) make up about 95% of all UK businesses. Small and medium-sized enterprises (SMEs, with 249 or fewer employees) account for more than 99%. They produce 53% of total turnover and 61% of employment. This highlights the popularity of the limited company model among startups and entrepreneurs.

Private companies limited by shares form the vast majority of new corporate registrations. Official records show that more than 95% of new companies choose this structure. Many cite flexible share allocation and investor familiarity as key reasons. More than 75% of these private companies operate in service-based fields, led by professional, scientific, and technical services. This trend reflects the UK’s shift towards knowledge-based commerce.

In a 2024 survey by a leading research group, 65% of new directors named “limited liability” as their top reason for incorporation. Meanwhile, 57% believed that a formal registered address improved customer confidence. These findings show the real advantages of limited liability and the credibility of official registration.

This widespread acceptance extends to group structures, subsidiaries, and special purpose vehicles. All rely heavily on the private company limited by shares model. Whether you operate as a sole director or form part of a founding team, data suggests that incorporation is a dependable growth strategy in the UK.

Company Types On The UK Companies Register

Steps to Set Up a Limited Company

There are a few key steps that you must take when setting up a UK limited company. These are:

Step 1. Selecting a Unique Company Name

The first step in establishing a limited company is selecting a unique name that sets you apart. Prepare a short list of potential names. This helps if your ideal choice is already taken. Your selected name must be unique. It must not conflict with existing registrations.

It must not contain certain sensitive terms, such as “Royal” or “Bank,” unless you have official permission. Use our name search tool to check availability. Each limited company name must end with “Limited” or “Ltd.”

Company Name Availability Checker for Limited Company Formation
Uniwide Formations’ Company Name Availability Search Tool

If you plan to expand operations in the future, also consider trademarks. Trademark registration is a separate process that provides extra protection. If you overlook it, you could face costly rebranding and legal fees.

Check domain availability for future websites, marketing materials, and email addresses. Brand consistency builds trust and shows professionalism. Align your domain name with your company title. For instance, if your firm is “Global Designs Ltd,” a matching domain enhances your identity.

Below are helpful considerations when selecting a name:

  • Make it relevant: Reflect your services or focus area.
  • Ensure it is memorable: Simple spellings and clear pronunciation work best.
  • Avoid sensitive words: If a word might require permission, explore simpler alternatives.
  • Stay unique: Minimise legal hurdles by confirming no other businesses use a similar name.

Thorough preparation at this stage can help your company stand out and look professional from day one.

Step 2. Choosing a Company Formation Package

We are a UK company formation agency based in London. Our experience shows that selecting the right formation package helps you start on solid ground. While there are cheaper ways to register, structured packages often include key services that make the early weeks of trading simpler. Typical features include:

  • Companies House Filing: This includes the £50.00 government filing fee
  • Registered Office Address Service: Protects directors’ personal addresses from public records
  • Business Mail Handling: Ensures official and business correspondence arrives at a third-party address
  • VAT and PAYE Registrations: Saves time if you plan to employ staff or sell goods.

Included in All Our Packages

  • Online Client Portal: Manage existing companies and set up set up a new limited company without re-entering your details.
  • Introduction to an Accountant (optional): You receive a free 30-minute consultation with a partner accountancy firm to discuss accounting and taxation.
  • FREE .co.uk Domain and Other Deals: Secure a free domain with leading UK providers for online hosting.
  • Business Bank Account (optional): You can choose from up to ten banking or payment institution accounts, including Barclays, Natwest, ANNA, or Tide.

Before you pick a package, confirm your budget and consider if you need extra services. If you plan overseas expansion, check that your package supports international growth, including tax registrations or custom articles of association. Evaluating these points early can help you avoid problems and manage finances effectively right from the start.

Company Formation Packages

Step 3. Reviewing Payment and Bundled Services

After deciding on a suitable formation package, move to the payment stage. We offer credit or debit card payment options, making the transaction seamless. Here, you may also add extra features like a registered office service, a London-based business address, and further support if your business requires more complex arrangements.

We often advise including services that enhance your privacy or streamline official correspondence. For instance, if you do not want your personal address visible on public records and search engines, using a professional registered office is a strategic choice. This approach both protects your confidentiality and presents a professional image to clients or partners.

Step 4. Completing the Online Application

After settling payment details, you are directed to an online form that collects your company’s essential data for Companies House. We find clarity and accuracy at this juncture vital to prevent delays or rejections. The form generally asks for:

  • Proposed company name and chosen ending.
  • Standard Industrial Classification (SIC) code to define the nature of the company’s trade.
  • Registered office address, which can be a separate service address if using a confidentiality option.
  • Directors’ details: full legal name, service address, home address, and date of birth.
  • Shareholders’ details: full legal name, service address, home address, and date of birth where required.
  • Share capital information, indicating how many shares each shareholder holds and the nominal value of those shares.

Completing the application accurately is essential for a valid incorporation. Our online interface facilitates this, providing help text and prompts along the way. Once you submit the form, we review for errors and then forward it to Companies House on your behalf. You receive immediate updates if more details are needed. After the application is approved, your limited company is officially formed, and you can begin trading under its name.

Essential Details for Company Registration

The registered office address

If you do not have a separate business address then you can use your home address as the registered UK company address. Or, if you value your privacy and do not want your home address shown to the public, then we offer a Registered Office Service. This lets you register your business at our location in Kensington, London.

The company’s activities

When registering your company you will need to select an SIC code from an approved list. SIC stands for Standard Industrial Classification. For instance, UK company activities are categorised by Standard Industrial Classification (SIC) codes. Each code represents a sector-specific activity, such as “62020” for computer consultancy.

You must choose at least one SIC code describing your main business operations. This classification helps government bodies assess the industry you operate in, so it is important to select carefully. You can find a list of all available SIC codes when you are filling in your company registration order on our website.

The names and addresses of the directors

Anyone over 16 can be a company director. You must provide each director’s full name, home address, service address and date of birth.

A service address is the official correspondence address that appears on the public record for company officers (directors, secretaries) and people with significant control. It can be the same as the company’s registered office or a different location. If you want to keep personal addresses private, consider our service for added protection.

The names and addresses of the shareholders (also known as members)

A shareholder is someone who owns shares in a limited company. You will need to provide the full name, home address, service address and date of birth of each shareholder.

The company’s share capital

This is the total value of all shares in the company that have been issued. The minimum amount of share capital for a private limited company is £1.00. When you register a limited company you will need to allocate shares to your shareholder(s). The simplest way is to give one share to each shareholder and make each individual share worth £1.00.

Some businesses prefer to create multiple share classes with different rights, such as Class A shares with voting rights or Class B shares that allow simpler distribution of profits. Below is a concise table illustrating examples:

Share ClassNominal ValuePrimary Purpose
Ordinary A£1Offers voting rights and dividend entitlements
Ordinary B£1May restrict voting rights but allow dividends

People with significant control over your company (PSCs)

Person with Significant Control (PSC) is someone who has significant ownership and/or control of a company. They are sometimes called “beneficial owners”. A PSC is anyone who:

  • Owns more than 25% of the company’s shares.
  • Holds more than 25% of the company’s voting rights.
  • Holds the right to appoint or remove the majority of directors.
  • Holds the right to exercise, or actually exercises, significant influence or control.
  • Holds the right to exercise, or actually exercises, significant control over a trust or company that meets at least one of the first four conditions above.

If you ultimately control more than 25% of the company or if you hold more than 25% of its shares, you are a PSC.

The company’s articles of association

The Articles of Association are the rules that define how a company is managed. They explain the rights and responsibilities of shareholders, directors, and company officers. You can use our standard articles, the Companies House Model Articles, or a customised version to match your business requirements.

Why Proof of Identity is Required to Set Up a Limited Company

We are a regulated company formation agency, which means we must verify every account holder, director, and person with significant control (PSC). If you are a UK resident, we attempt a digital ID check using the details from your company order form. Our system successfully processes 90% of UK applicants this way.

If you are not eligible or do not pass our digital ID check, we will email you with guidance. In some cases, you will need to use the CREDAS mobile app, which confirms your proof of ID within five minutes. We also require a recent proof of address, such as a bank statement or utility bill, to meet strict anti-money-laundering rules.

For non-UK customers, we only offer our “Non-resident” company registration package. You must pass our verification checks, and you should confirm that your country of residence is not listed as high risk. If you believe you might be in or from a high-risk jurisdiction, contact us before you order.

It is possible to register a company on behalf of someone else. You must still supply identification for the account holder, directors, and PSCs. Special provisions exist for solicitors, accountants, and other “regulated” entities, who can rely on their professional status to meet UK anti-money-laundering obligations. We may require additional assurances that you are supervised by a recognised authority or professional body. Proper checks protect legitimate owners, deter financial crime, and give your new company the credibility it deserves.

Further Advantages of Registering a Company through Uniwide Formations

When you register your company on our company formation portal you get additional advantages.

Business Bank Account

After you have registered your company you will need to open a business bank account in the name of your new company in order to start trading. You will be able to apply for this business bank account in leading UK banks, such as Barclays, HSBC or NatWest, through our platform. When you fill in the application on our website you will be given a list of up to 10 major UK banks from which to choose.

Business Bank Account Setup for a New Limited Company

Accounting Software When Setting Up a Limited Company

Alongside the bank account, we usually recommend adopting robust accounting software. Common providers include QuickBooks, FreeAgent, Xero, and Sage, each offering features to automate invoicing, reconcile bank payments, and track expenses. Many of these platforms facilitate direct submission of data to HM Revenue & Customs.

In our experience, digital tools reduce administrative burdens, leaving more time for strategic activities. They also streamline the management of Value Added Tax (VAT) paperwork if you register for VAT. Our system will show you deals from accounting software providers that are available when you register a company through us.

Accounting Software When Setting Up a Limited Company

Why You Need an Accountant When Setting Up a Limited Company

Good financial health depends on expert support. Getting professional guidance is particularly important when you set up your limited company, ensuring compliance from day one. An accountant or tax advisor can navigate changing Corporation Tax rules or new VAT thresholds. They also guide you on PAYE, staff payroll, and share allocations for investors.

We offer a free introduction to an accountant, helping you find the right professional for your needs. Early advice often saves money and prevents errors in your annual accounts. This step is vital when your business starts scaling.

Receiving Documents After Incorporation

Most companies are incorporated within three to 24 hours. Once Companies House confirms your application, you receive a digital certificate of incorporation. This certificate proves that your entity is legally formed and listed on the public register. We recommend that you store a copy with your other corporate documents, as banks, clients, or suppliers may request it.

Certificate of Incorporation UK

After formation, we also provide the following digital documents through our secure portal:

  • Memorandum and Articles of Association.
    These explain how the organisation is managed and define the responsibilities of directors and shareholders.
  • Share Certificates.
    These prove ownership of shares in the newly formed company.
  • Register of Directors and Members.
    This record includes directors, shareholders, and PSCs. You must update it if anyone joins or leaves.
  • Company Authentication Code.
    This unique code is used to file future changes or returns online. Keep it safe to prevent unauthorised alterations.
  • Digital Incorporation Minutes.
    These minutes record your company’s first board meeting, at which initial resolutions were passed.

Paper documents can be arranged if required, for instance for bank applications. Your company is usually ready to trade and invoice as soon as it appears on the register.

Becoming a director carries significant responsibilities. If you are about to set up your own limited company, it is crucial to understand the legal framework you will need to follow.

Once you complete your company formation, you must comply with the Companies Act 2006 and other UK regulations that govern limited companies. Directors oversee the strategic direction of the company, ensure that the business meets its financial obligations, and uphold best practices. It is vital to recognise how duties apply to you directly. For example:

  1. Maintain accounting records: Directors must keep accurate financial information, such as receipts, invoices, and bank statements, for at least six years. Understanding what records a limited company must keep is essential to ensure compliance.
  2. File annual accounts: These must be submitted to Companies House, typically within nine months of your company’s financial year end. This is part of your company’s annual filing requirements, which also include other key submissions.
  3. Submit a confirmation statement: This is a yearly snapshot of your company’s management and share ownership.
  4. Pay any corporation tax due: If your company makes a profit, you must file a Company Tax Return and pay any tax within set time limits.

Breach of these responsibilities can lead to penalties or, in extreme cases, personal liability. We advise you to align your business processes or systems so that essential filings and payments are never missed. Our system can send regular digital reminders when your confirmation statement and accounts are due.

As part of the UK’s push for transparency, directors must also identify Persons with Significant Control (PSCs) who own more than 25% of company shares or voting rights. This data must remain up to date, with any changes filed promptly. Failure to keep the PSC register accurate could result in significant fines.

Finally, a director must exercise skill, care, and diligence and act in good faith to promote the success of the company. This requires balancing the interests of shareholders, employees, and other stakeholders. Directors must never use their position for personal gain at the expense of the company. Observing these principles protects not only the financial health of the company but also the reputation of the individuals involved.

Maintaining Statutory Registers

A limited company must keep up-to-date statutory registers. These include registers of directors, shareholders, and people with significant control (PSCs). Accurate records must reflect any new appointments or share transfers. Many directors prefer secure digital platforms to ensure quick updates and reliable backups.

UK Taxation When You Set Up a Limited Company

Once you set up a limited company, understanding your tax obligations from the outset will help you avoid penalties and maximise tax efficiency.

In the UK, limited companies pay Corporation Tax on their profits. For accounting periods beginning in April 2023 and onwards, the main rate of Corporation Tax is 25% for profits above a specific threshold, though there are marginal relief rules for smaller profits. It is crucial to calculate your taxable profits accurately, deducting allowable business expenses while ensuring thorough record-keeping. You must then submit the Company Tax Return (CT600) by the statutory deadlines or face fines.

We recommend familiarising yourself with HMRC’s digital submission requirements and employing reliable accounting software. Value Added Tax (VAT) registration is another factor to consider if your taxable turnover surpasses the threshold of £85,000 per year (as of January 2025). If you expect to exceed that threshold, you must register within 30 days of realising the threshold will be met. Voluntary registration can also prove beneficial if your business supplies other VAT-registered entities.

Depending on how your limited company pays directors and staff, you will have additional tax responsibilities. For instance, salaries attract PAYE (Pay As You Earn) and National Insurance contributions. Dividends, on the other hand, have separate tax rates for individual shareholders. Arranging the remuneration mix requires careful planning to comply with HMRC guidelines while optimising personal tax positions.

Keep a Dormant Company Compliant

Some limited companies remain dormant while directors finalise business plans. Even so, you must still file annual accounts and confirmation statements. You will not pay Corporation Tax if there is no trading activity, but you must inform HMRC that your company is dormant. If you miss filing deadlines, you face the same penalties as active companies. Once ready to trade, update your status with both Companies House and HMRC to avoid confusion.

Real-Life Examples of Setting Up a Limited Company

Real-world insights show why company formation matters. For example, Samantha was a freelance designer who started as a sole trader. She faced serious liability concerns after a large-scale project was delayed, which led to a client’s threat of litigation. Worried about personal liability, Samantha formed a private company limited by shares to protect her personal assets. By doing so, she contained potential losses to the funds invested in the business. This structure allowed her to accept bigger projects with confidence.

Another example is Martin, an entrepreneur from Manchester who launched a tech start-up. To formalise their business structure and attract investors, Martin and his co-founders decided to set up a limited company, ensuring clear ownership and legal protections from the start. He brought in two co-founders and sought seed funding from an angel investor. Adopting a limited company structure gave investors a clear view of the shareholding arrangement. It also appeared more credible than a partnership because roles were formally documented. Martin created multiple share classes to accommodate diverse investment scenarios and secure further capital. This approach let him grow without losing operational control.

These examples show why completing each incorporation step correctly is worthwhile. Standard articles of association, detailed record-keeping, and clear share allocations foster legal clarity. Potential investors value the professional oversight that a formal limited company structure provides. It also establishes clear boundaries around financial obligations, safeguarding directors’ personal finances. This stability helps your business attract new talent and pursue expansion.

Samantha reduced personal risk while keeping her creative freedom, even with demanding clients. Martin’s structured governance gave him access to essential funding for product development and market entry. By reflecting on these cases, you can create a formation path that meets your objectives.

How to Register a Limited Company in the UK

Final Thoughts on How to Set Up a Limited Company

Setting up a UK limited company can open up new opportunities for your business. By following these steps, you can start your own limited company with confidence. If you are ready to take the next step in your entrepreneurial journey, our comprehensive support in company formations can simplify the process.

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