1. Understand What a Private Limited Company Is
A private limited company (Ltd) is a legal business structure in the UK that separates personal finances from business finances. It provides limited liability protection, meaning shareholders are only responsible for company debts up to the value of their shares.
2. Choose a Company Name
Your company name must:
- Be unique and not already registered with Companies House
- Not include restricted or offensive words
- End with “Limited” or “Ltd” (unless exempt)
You can check name availability on the Companies House website before registering.
3. Appoint Directors and Shareholders
To set up a private limited company, you need:
- At least one director (responsible for running the company)
- At least one shareholder (can be the same person as the director)
- Details of anyone with significant control (PSC)
4. Prepare Company Documents
You must have:
- Memorandum of Association: Confirms the intention to form the company.
- Articles of Association: Sets out the rules for running the company. You can use standard model articles or create custom ones.
5. Register the Company with Companies House
You can register online or by post. You’ll need to provide:
- Company name and registered office address
- Director and shareholder details
- PSC information
- SIC code (describes your business activity)
The online registration fee is usually £12, and the company is often set up within 24 hours.
6. Register for Corporation Tax
Once the company is formed, you must register for corporation tax with HMRC within 3 months of starting trading.
7. Set Up a Business Bank Account
Open a dedicated business account to keep finances separate and simplify accounting.
8. Meet Ongoing Legal Obligations
Running a private limited company comes with responsibilities, including:
- Filing annual accounts and confirmation statements with Companies House
- Keeping statutory registers (shareholders, directors, PSCs)
- Paying corporation tax and filing returns on time
Frequently Asked Questions
How long does it take to set up a private limited company?
Online applications are usually approved within 24 hours, but postal applications can take longer.
Can I set up a company on my own?
Yes, you can be the sole director and shareholder.
What is the main benefit of a private limited company?
Limited liability protects personal assets if the business faces financial difficulties.
Conclusion
Setting up a private limited company in the UK is a straightforward process that offers legal protection and credibility. By following these steps, you can register your company, stay compliant, and focus on growing your business.