1. Introduction to Limited Company Registration
If you want to set up a limited company in the UK, you must register it with Companies House, the official registrar of companies. Forming a limited company gives your business a separate legal identity and offers limited liability protection for shareholders.
2. Why Register with Companies House?
- Legal requirement for limited companies.
- Protects your company name.
- Provides limited liability protection.
- Enhances credibility with clients and investors.
- Makes your business eligible for certain funding and tax benefits.
3. Types of Limited Companies You Can Register
- Private Company Limited by Shares (Ltd) – Most common, owned by shareholders.
- Private Company Limited by Guarantee – Usually for charities and non-profits.
- Public Limited Company (PLC) – Can sell shares publicly, requires more capital.
4. Requirements to Set Up a Limited Company
Before applying, you’ll need:
- A unique company name.
- At least one director (must be over 16).
- At least one shareholder (can be the same person as the director).
- A registered office address in the UK.
- Standard Industrial Classification (SIC) code to describe business activity.
- Memorandum and Articles of Association (company rules).
5. Choosing a Company Name
- Must be unique and not already registered.
- Cannot be too similar to an existing name.
- Should avoid sensitive or offensive words unless permission is granted.
- Check availability on the Companies House name search tool before applying.
6. Step-by-Step Process to Set Up a Limited Company with Companies House
Step 1: Decide on Structure
Choose whether your company will be limited by shares, guarantee, or be a PLC.
Step 2: Appoint Directors and Shareholders
Provide full names, addresses, and other details for each.
Step 3: Provide Registered Office Address
This will be publicly visible and must be a UK address.
Step 4: Prepare Documents
- Memorandum of Association (company creation agreement).
- Articles of Association (rules for running the company).
Step 5: Register Online or by Post
- Online: Costs £12 and usually takes 24 hours.
- By Post: Costs £40 and takes 8–10 days.
Step 6: Receive Certificate of Incorporation
This confirms your company legally exists and includes company number and formation date.
7. Documents Required for Registration
- Identity proof of directors and shareholders.
- Registered office address proof.
- Details of shares issued and shareholder agreements.
8. Post-Registration Requirements
Once your company is formed, you must:
- Register for Corporation Tax within 3 months.
- Open a business bank account.
- File confirmation statements annually with Companies House.
- File annual accounts and company tax returns.
- Maintain accurate accounting records.
9. Costs of Setting Up a Limited Company
- Online application: £12.
- Postal application: £40.
- Same-day service: £100.
Additional legal or accountant fees may apply if you use professional services.
10. Benefits of a Limited Company
- Limited liability protects personal assets.
- Higher credibility compared to sole traders.
- More tax-efficient in many cases.
- Easier to attract investors.
- Company name protection.
11. Disadvantages of a Limited Company
- More paperwork and compliance.
- Public disclosure of company details.
- Annual filing costs and responsibilities.
12. Common Mistakes to Avoid
- Choosing a name too similar to an existing business.
- Incorrect SIC code selection.
- Missing deadlines for filing annual accounts.
- Using a personal account instead of a business account.
13. Limited Company vs Sole Trader
- Sole Trader: Easier to set up, full personal liability.
- Limited Company: Separate legal entity, limited liability, more credibility.
14. How Long Does It Take to Register?
- Online registration: Usually within 24 hours.
- Postal registration: 8–10 working days.
- Same-day service: By end of the day if filed before 3 pm.
15. Do You Need an Accountant?
Not legally required, but highly recommended to:
- Manage tax filings.
- Ensure compliance with Companies House.
- Handle payroll and VAT if applicable.
Frequently Asked Questions
Q1: Can I register a limited company myself?
Yes, you can do it online through Companies House without needing an agent.
Q2: Can I be the only director and shareholder?
Yes, one person can own and run the company.
Q3: Do I need a UK address to register?
Yes, a UK registered office address is mandatory.
Q4: How much tax does a limited company pay?
Corporation Tax applies to profits, currently 25% (may vary depending on profit levels).
Q5: Can I change my company name later?
Yes, you can apply to Companies House to update your company name.
Q6: Do I need to be a UK citizen to set up a company?
No, non-UK residents can also set up a company if they meet requirements.
Conclusion
To set up a limited company with Companies House, you need a unique name, at least one director and shareholder, and a UK registered office. The process is simple online, cost-effective, and usually completed within 24 hours. While more compliance is required compared to sole traders, the benefits of limited liability, credibility, and growth opportunities make it a strong choice for entrepreneurs.