Setting Up a Limited Company

Is a limited company right for me?

Many people start as a sole trader and move to a limited company as profits grow. There is no single right answer, so it’s worth talking to us before you decide.

What you need to decide first

• Company name. It must be different from existing companies and end in “Limited” or “Ltd”. You can check availability free on Companies House.
• Directors. The people who run the company. You need at least one, aged 16 or over.
• Shareholders. The people who own the company. Ownership is split by shares (for example, 100 shares of £1 each).
• Registered office. An official UK address that will be public. Many people use their accountant’s address rather than their home.
• Registered email address. Companies House uses this to contact you. It isn’t made public.
• What the business does. You choose a short code (a “SIC code”) that describes it.

How to set it up, step by step

1. Verify your identity. Every director and anyone with significant control (usually owning over 25%) must verify their identity before the company can be set up. You can do it for free online with GOV.UK One Login, or we can do it for you. You’ll get a personal code to use when forming the company.
2. Register with Companies House. This is done online. You’ll give the name, directors, shareholders and addresses, and agree to standard rules (“model articles”). It’s usually approved within 24 to 48 hours.
3. Receive your certificate. You’ll get a certificate of incorporation with your company number. HMRC will then post you the company’s tax reference (UTR).
4. Open a business bank account. The company’s money must be kept separate from yours. Most banks will ask for your certificate and ID.
5. Set up payroll if you’ll pay a salary to yourself or anyone else. This must be done before the first payday.
6. Register for VAT if your sales go over £90,000 in a rolling 12 months, or earlier if it suits you.

We can handle all of these steps for you, including using our address as your registered office.

How do I pay myself?

The company’s money isn’t yours to take whenever you like. Most directors pay themselves in two ways:

• A small salary, run through payroll. This is a business cost, so it reduces Corporation Tax, and it can count towards your State Pension.
• Dividends, paid out of profits after Corporation Tax. These have their own, lower tax rates.

The best mix changes each year, so we’ll work out the right amounts for you. You can only pay dividends if the company has enough profit left after tax.

Key tax rates for 2026/27

What you must do every year

Late filing means automatic penalties, from £150 for accounts filed up to a month late at Companies House. As your accountant, we keep track of these dates for you.

Your responsibilities as a director

• Keep proper records of everything the company earns and spends.
• Act in the company’s best interests and keep its money separate from yours.
• Tell Companies House about changes, such as a new address, director or shareholder.
• Keep the company’s registers (of directors, shareholders and people with significant control) up to date.

Your getting-started checklist

• Talk to us about whether a company suits you
• Choose and check your company name
• Decide who the directors and shareholders will be
• Verify your identity with Companies House
• Register the company (or ask us to)
• Open a business bank account
• Register for Corporation Tax and set up payroll
• Keep your receipts and records from day one

This guide is a simple overview based on Companies House and HMRC guidance as of October 2026. It is not professional advice for your situation, so please speak to us before acting on it.