Why Register as a Limited Company?
When starting a business in the UK, you have several legal structures to choose from — sole trader, partnership, or limited company being the most common. Registering as a private limited company (Ltd) offers key advantages: limited liability protection, a professional image, and potential tax efficiencies. This guide focuses on the limited company route via Companies House.
Before You Register: Key Decisions
Before submitting your application, you'll need to decide on the following:
- Company name – Must be unique and not too similar to an existing registered name. You can check availability on the Companies House name availability tool.
- Registered office address – A UK address (not a PO Box) that will appear on the public register. This can be your home address or a virtual office address.
- Directors – At least one director is required. They are legally responsible for running the company.
- Shareholders and shares – Decide how many shares to issue and to whom. Most small companies start with 1 or 100 shares.
- SIC code – A Standard Industrial Classification code that describes what your business does.
How to Register: Step by Step
- Go to Companies House – Visit gov.uk/register-a-company and use the WebFiling service or the new streamlined company registration service.
- Complete the IN01 form – This covers company name, registered address, director details, shareholder information, and articles of association.
- Submit your Memorandum and Articles of Association – Most companies use the standard "model articles" provided by Companies House, which simplifies this step.
- Pay the registration fee – Online registration costs £50 (as of 2025) and is usually processed within 24 hours.
- Receive your Certificate of Incorporation – Once approved, you'll receive this digitally. It confirms your company's legal existence and includes your unique company number.
What Happens After Registration?
Registering with Companies House is just the beginning. Here are the key obligations that follow:
- Register for Corporation Tax – You must notify HMRC within 3 months of starting to trade. Do this via Gov.uk.
- Set up a business bank account – Legally, company finances must be kept separate from personal finances.
- Register for VAT (if applicable) – Required if your taxable turnover exceeds the VAT threshold (currently £90,000).
- File annual accounts and a Confirmation Statement – Both are required each year to keep your company in good standing.
- PAYE registration – If you take a salary or have employees, register as an employer with HMRC.
Sole Trader vs. Limited Company: A Quick Comparison
| Factor | Sole Trader | Limited Company |
|---|---|---|
| Setup cost | Free | £50 |
| Personal liability | Unlimited | Limited |
| Tax | Income Tax on profits | Corporation Tax on profits |
| Admin burden | Low | Moderate |
| Professional perception | Varies | Generally higher |
Getting Professional Help
While you can absolutely register a company yourself, many new business owners work with an accountant from the outset. An accountant can advise on the most tax-efficient structure, handle HMRC registrations, and set up your bookkeeping correctly. The cost of early professional advice often saves money in the long run.