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Your guide to setting up a limited company in the UK (2025)

Your guide to setting up a limited company in the UK (2025)

To set up a limited company in the UK, you must register it with Companies House. You’ll need to provide key company information like its name, director details, and shareholder details. Most people use a company formation agent to register, as they’re quick, cost-effective, and offer additional services.

setting up a limited company in the UK
In this article

What is a limited company and its benefits?

How to set up a limited company

What you’ll need to set up a limited company in the UK

Submitting your incorporation application to Companies House

Your responsibilities after your company’s incorporation

Lay the financial foundations of your company quickly

Start your company today

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Graeme Donnelly

Author

Start your business

5 Nov 25

23 min

Setting up a limited company in the UK is easier than you might think. In fact, the World Bank rates the UK as one of the easiest places in the world to register a company. 

Whether you're a first-time entrepreneur with a big idea, a freelancer formalising your operations, or a small-business owner scaling up, the decision to register a limited company can unlock powerful benefits. 

In this guide, we’ll demystify the UK limited company registration procedure, so that you know everything that’s required to get your company up and running, and all the benefits you’ll receive. 

Key Takeaways

  • Registering a UK limited company provides numerous benefits, including limited liability protection, which shields your personal assets if the business falls into trouble. 

  • To register, you must apply to Companies House by providing them with key information about your company. 

  • Once your company is registered, you must ensure you fulfil your legal duties and responsibilities. 

What is a limited company and its benefits?

A limited company is a formal UK business structure that’s registered with Companies House (the UK’s registrar of companies).  

A limited company is a popular business structure for several reasons: 

  • Separate legal entity – it exists independently from its shareholders, allowing it to hold its own assets, enter into contracts, and take legal action. 
  • Limited liability – the personal assets of the shareholders (the owners) are protected if the company faces financial difficulty. Don’t underestimate how important this is – Nicholas Murray Butler described companies with limited liability as being “the greatest single discovery of modern times”. 
  • Tax – limited companies offer greater opportunities for tax planning and efficiency. 
  • Reputation – a limited company generally appears more credible and established to clients and investors. 
  • Flexibility – it provides a scalable framework, ideal for growth and bringing in new investors. 

In comparison, sole traders don’t enjoy the benefits that limited companies do. They have no distinct legal entity, no limited liability protection, and fewer tax planning opportunities. While acting as a sole trader has its own benefits (such as less administration), ambitious founders will usually favour limited companies. 

To understand this in practice, take James Dyson. He started as an independent inventor, effectively a sole trader. As demand grew, he formed a limited company in 1993 (later renamed Dyson Limited). This gave him the structure to protect his intellectual property, gain investment, and grow into a globally recognised brand.

How to set up a limited company

The easiest way to set up a UK limited company is through a company formation agent. They collect your company’s details, check everything for accuracy, and submit your application to Companies House. 

Most also provide the required documents, such as your articles of association, along with optional extras, including a registered office address. Company registration services start from around £59, which generally includes the £50 Companies House fee.

What you’ll need to set up a limited company in the UK

When going through the UK limited company registration process, you’ll need these to hand: 

A unique company name

Your company’s official registered name. There are a few rules it needs to follow, namely that it must not already be taken and must end in either “Limited” or “Ltd”.  

Registered office address

This is your company’s official UK address, which appears on the public register and receives legal and government mail. Formation agents like Company Formations Direct offer a trusted address service, allowing you to use an address that's separate from your home address. It’s also great for non-residents who don’t have a UK address of their own. 

Registered email address

You must provide an email address for Companies House to send electronic notices and communications to. It won’t appear on the public register, and you’re free to choose any address you like – so long as you actively monitor it.  

Information about your business activities

You’ll need to specify what your company does by selecting 1 to 4 Standard Industrial Classification (SIC) codes. These describe your business activities and must be chosen from Companies House’s official SIC code list. Be sure to capture your activities as fully as possible. 

Details of your directors

The directors are the individuals who oversee and manage your company on a day-to-day basis. You can act as the only director of your company (the law requires just one director).  

For each director, you must provide the following details: 

  • Title (Mr, Ms…) 
  • Full name 
  • Date of birth 
  • Nationality 
  • Occupation 
  • Home address 
  • Service address (a.k.a. correspondence address)* 

Details of your company secretaries

Most companies don’t have a company secretary, but you can appoint one to assist the directors in fulfilling their legal duties. The details needed are as follows: 

  • Title (Mr, Ms…) 
  • Full name 
  • Service address (a.k.a. correspondence address)* 

Details of your shareholders

Shareholders are the owners of the company, with ownership represented through shares. Generally, the more shares a person holds versus the other shareholders, the more of the company they own. For example, someone holding two out of four total shares would typically own 50% of the company. 

The required shareholder details are as follows: 

  • Full name 
  • Service address (a.k.a. correspondence address)* 
  • Number and class of shares owned 
  • Any three of the following five security details, which act as an electronic authentication: 
  • First three letters of your father’s first name 
  • First three letters of your mother’s maiden name 
  • First three letters of your town of birth 
  • Last three digits of your telephone number 
  • Last three digits of your National Insurance ID number 
  • Last three digits of your passport number 

Details of your people with significant control

These are the people who hold “significant influence or control” over your company. To be a person with significant control, you must meet at least one of a set of criteria. Normally, your people with significant control (PSCs) are also the shareholders, but not always.  

The following details are required for each person with significant control: 

  • Title (Mr, Ms…) 
  • Full name 
  • Date of birth 
  • Nationality 
  • Occupation 
  • Home address 
  • Service address (a.k.a. correspondence address)* 
  • Nature of control (for example, hold more than 25% but not more than 50% of the company’s shares) 

Articles of association

Every company must include articles of association at incorporation. These set out the rules for how the company is run. 

Don’t worry, formation agents like Company Formations Direct usually handle this, using either the model articles or their own tailored set. In most cases, no action is required from you. 

You also used to have to provide a memorandum; however, this is now produced by Companies House automatically when forming a company electronically.  

Submitting your incorporation application to Companies House

Once your application has been put together, it will be submitted to Companies House. Companies House will charge its incorporation fee at this point, although this is usually included in your formation agent’s price. 

How much does it cost to set up a limited company in the UK?

Companies House charges a £50 incorporation fee for all electronic applications, so most formation agents’ prices will start from here. Despite a recent fee increase, the UK remains one of the most affordable places in the world to start a company. 

What happens once your application has been approved

Your application will normally be processed within 1 working day. Once approved, you’ll receive a Certificate of Incorporation, confirming your company’s legal status. It includes your registration number, which you’ll need at various points throughout your company’s life. 

Your responsibilities after your company’s incorporation

After your UK limited company registration, you’ll have some ongoing obligations to deal with – both as a company and as a director. This is in addition to running the company and ensuring it complies with all other laws (for example, health and safety and the Equality Act). 

Companies House requirements

Some of your responsibilities to Companies House include: 

  • Submitting annual accounts and a Confirmation Statement. 
  • Keeping statutory registers up to date, including your People with Significant Control (PSC) register. Maintaining accurate shareholder records.

    HMRC Requirements

You also have obligations to HMRC, including: 

It’s best to address these issues right from the start, helping you stay compliant and avoid missed deadlines.

Lay the financial foundations of your company quickly

A strong financial setup from day one is vital.

Start by opening a dedicated business bank account. While not legally required, having a dedicated bank account is highly recommended as it separates your business and personal finances. This is beneficial for several reasons, including administrative ease and compliance with HMRC. 

Invest early in software like Xero, which offers invoicing, expense tracking, reconciliation, and automated tax alerts, keeping you compliant with minimal effort. 

Lastly, get expert support. Formation and secretarial providers (like CFD), accountants, and solicitors can guide your setup and help you avoid costly missteps. 

Start your company today

Setting up a UK limited company has never been easier. And the benefits of doing so are wide-ranging – from giving you a trustworthy and credible image, to providing financial protection should things go wrong. 

To start your company with Company Formations Direct, simply check that your company name is available using our name checker tool. Your company can be registered in just one working day, and we’ll be here to support you throughout the entire life of your company. 

UK limited companies are primarily liable for Corporation Tax on their profits, which is currently 25% (as of 2025) for companies with profits over £250,000. There’s a lower rate of 19% where profits are under £50,000. If earning between £50,000 and £250,000, a tapered rate is applied. You’ll also need to collect and pay VAT if your turnover exceeds £90,000. If the company employs staff, including paying directors a salary, it must also operate Pay As You Earn (PAYE), which involves National Insurance contributions. Other possible taxes include business rates (if operating from commercial premises) and Capital Gains Tax on the sale of company assets. You should consult an accountant for tailored tax planning. 

To set up a limited company, you must register it with Companies House (the UK’s registrar of companies). This involves completing an application that contains your company's details, such as its name, business activities, directors, and shareholders. Once your application has been approved, Companies House will register your company and issue you with a Certificate of Incorporation. The easiest way to apply for a new company is through a formation agent, like Company Formations Direct. 

Yes. Under the Companies Act, a limited company requires only one director and one shareholder, and they can be the same person. This makes it entirely possible for solo founders to incorporate and manage their business independently.

To set up a limited company in the UK, you must register it with Companies House. They will tell HMRC that your company has been formed. HMRC will then send you your Unique Taxpayer Reference (UTR) by post within a few weeks. However, you must create an HMRC online Business Tax Account using the UTR to manage Corporation Tax filings. If you need to register for PAYE or VAT, etc., you will need to register for these directly with HMRC.

Yes, you can update your company’s SIC (Standard Industrial Classification) code if your business activities change. You can do this by submitting an updated Confirmation Statement (form CS01) to Companies House. It's important to keep this accurate, as it reflects the nature of your operations to regulators, clients, and investors. 

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