Everything you need to register, comply and stay on top of your new company explained in plain English.
Thinking of setting up a limited company this year?
Whether you’re a consultant, a small business owner, or a property investor, you’re probably asking:
“How to set up a limited company in the UK”
It’s a fair question. Between Companies House, HMRC, and a dozen acronyms (PSC, SIC, PAYE…), it’s easy to feel lost.
This guide walks you through how to set up a limited company in the UK (2025/26) — step by step, with GOV.UK links, practical checklists, and real-world tips from the Heights team.
By the end, you’ll know:
- Exactly what to file and when
- Which deadlines matter most
- How to stay compliant after incorporation
- And where an accountant can save you stress later
Step 0: Before you start is a limited company right for you?
Before you jump into registration forms, it’s worth checking if becoming a limited company is the right move for your business.
The benefits:
✅ You limit personal liability your business is its own legal entity.
✅ You can pay yourself more tax-efficiently (mix of salary + dividends).
✅ You look more professional to lenders and clients.
The downsides:
⚠️ More admin and reporting (to Companies House and HMRC).
⚠️ Your company’s details are public.
⚠️ You’ll need to manage Corporation Tax, payroll, and VAT compliance.
👉 Still not sure? Read: When Should a Sole Trader Become a Limited Company? where we compare the two structures in full.
If your goal is property ownership or investment, read our spin-off guide:
Setting Up a Ltd Company for Properties: Holding Company, Group Structure & SPV Explained it covers how to structure SPVs and holding companies correctly.
Step 1: Choose your company name and SIC code
You can’t register a limited company until you’ve picked a name and a SIC code both are required by Companies House.
Choosing a name (2025 rules):
- It must be unique and not too similar to an existing company.
- It must end in “Limited” or “Ltd.” (unless you register in Wales).
- You can’t use restricted words like “bank”, “association” or “trust” without permission.
👉 Check yours on the Companies House name checker.
SIC code:
This is your company’s official description — e.g. “70229 – Management Consultancy Activities” or “68100 – Buying and Selling of Own Real Estate.”
Search SIC codes on GOV.UK and pick the one closest to your activity.
💡 Heights Tip:
Pick your code based on what you’ll actually be doing, not what you might do it can always be updated later.
Step 2: Appoint directors, shareholders and PSCs
Every UK limited company must have:
- At least one director (aged 16+)
- At least one shareholder
- At least one Person with Significant Control (PSC) anyone owning >25% of shares or voting rights
You’ll need their:
- Full name and service address (no PO Boxes)
- Date of birth, nationality and occupation
- Share allocation and voting rights
💡 Heights Tip:
If you have more than one shareholder, agree early how decisions and dividends will work and if you want it legally watertight, get a solicitor to draw up a shareholder agreement that’s future-proofed.
Step 3: Prepare your legal documents
You’ll be asked for:
- A Memorandum of Association (signed by all initial shareholders confirming they want to form the company)
- Articles of Association (your company’s internal rulebook how directors and shareholders make decisions)
- A Statement of Capital (how many shares, their value, and what rights come with them)
Most small companies use Model Articles by default, but if you’re setting up a group structure, it’s worth having them reviewed.
Step 4: Choose your registered office address
Your registered office is your company’s official legal address.
It must:
- Be a physical UK address (no PO Boxes)
- Match the region where your company is registered (England & Wales, Scotland, or NI)
- Appear publicly on the Companies House register
Every director also needs a service address (public) and a private home address (confidential).
Step 5: Register with Companies House
This is the moment your company officially exists.
Go to GOV.UK and complete your application online.
You’ll need:
- Company name and SIC code
- Registered office address
- Director, shareholder and PSC details
- Articles of Association and Statement of Capital
Cost: £50
Processing time: Companies House advises up to 2 working days
Outcome: You’ll receive a Certificate of Incorporation and your Company Number
Prefer to post it? Use Form IN01 (£71, about 10 working days).
✅ Avoid rejection:
Check all names and addresses match, PSC info is complete, and the name isn’t too similar to another company.
See the official Companies House registration checklist for examples.
Step 6: Register for Corporation Tax
Within 3 months of starting to trade, you must register your company for Corporation Tax with HMRC.
You’ll need your Unique Taxpayer Reference (UTR), which arrives at your registered office about a week after incorporation.
You can register via your Business Tax Account.
💡 Heights Tip:
“Trading” doesn’t just mean earning income if you’ve bought equipment, sent quotes or opened a bank account, HMRC may count that as trading activity.
Step 7: VAT, PAYE and other registrations
VAT registration
- Compulsory if your turnover will exceed £90,000 in a 12-month period.
- Voluntary registration can help reclaim VAT on early setup costs.
Register at gov.uk/vat-registration.
PAYE (if you’ll pay yourself or staff)
If you plan to pay yourself a salary as a director, you must register as an employer before your first payday.
More on this here: How to Pay Yourself as a Director (2025/26)
Insurance and licences
- Employers’ Liability (if you hire anyone)
- Professional indemnity or public liability (for service-based businesses)
- Sector-specific licences where required (food, property, finance, etc.)
Step 8: Post-setup checklist
Once you’re incorporated, here’s what to do next:
| Task | Why it matters |
|---|---|
| Open a business bank account | Keeps finances compliant and separate from personal funds. |
| Set up accounting software | Helps you stay MTD-ready for VAT and HMRC reporting. |
| Register for PAYE / payroll | Required before paying yourself or employees. |
| Create statutory registers | Record directors, shareholders and PSCs. |
| Schedule key deadlines | Avoids late filing penalties and HMRC fines. |
💡 Heights Tip:
Add all Companies House and HMRC deadlines to your calendar now most penalties start at £150 and escalate fast.
Ongoing compliance deadlines
| Requirement | When It’s Due | Notes |
|---|---|---|
| Register for Corporation Tax | Within 3 months of trading | via Business Tax Account |
| First company accounts | Within 21 months of incorporation | then annually |
| Corporation Tax payment | 9 months + 1 day after year end | return due within 12 months |
| Confirmation statement | Every 12 months | update company info and PSCs |
Common Questions About Setting Up a Limited Company
How long does it take to register a limited company?
Online applications are usually approved within 24 hours, but Companies House says to allow up to 2 working days.
Postal applications (Form IN01) can take up to 10 days.
How much does it cost to set up a limited company?
It’s £50 online or £71 by post.
Formation agents often charge more, but they don’t add any extra legal value, the official GOV.UK route is the simplest and cheapest.
That said, if you have more than one shareholder, it’s always worth speaking with a solicitor to draw up a shareholders’ agreement. This keeps everything clear, protects each party, and avoids disputes later.
It’s also a good idea to have an accountant handle the company setup, especially if you’ll need to register for VAT, PAYE, or plan future tax-efficient pay. It saves time, prevents costly mistakes, and ensures your structure is correct from day one.
💡 Heights Tip:
Prices for legal or accountant-assisted setups vary case by case depending on the complexity of your structure, but the peace of mind is usually worth it.
Do I need an accountant to set up a limited company?
You can register a company yourself, but an accountant can help you:
- Set up VAT and PAYE correctly
- Structure your shareholding for future tax planning
- Avoid missing HMRC registration deadlines
Do I need to register for VAT straight away?
Not unless your turnover is expected to exceed £90,000 in a year.
However, voluntary registration can help reclaim VAT on startup costs, especially for B2B or property-related companies.
Can I be the only director and shareholder?
Yes, many small companies are.
You’ll still need to file annual accounts, a confirmation statement, and pay Corporation Tax.
Your next step
Setting up a limited company doesn’t need to be confusing.
With the right checklist and a bit of clarity, you can do it confidently.
📥 Download your Limited Company Setup Pack (2025/26)
Inside you’ll find:
- A step-by-step setup checklist
- GOV.UK registration links
- A compliance deadline tracker
- Bonus: 7 first-year mistakes to avoid
Then, once your company’s up and running, check out:
➡️ How to Pay Yourself as a Director (UK 2025/26), our practical next step on salary, dividends and total tax.