How to set up a limited company

Incorporate through Companies House, usually online and usually the same day. You need a company name that is available and not too similar to an existing one, at least one director, at least one shareholder, details of anyone with significant control, a registered office address that is an appropriate address where post can be acknowledged, and a SIC code describing what you do. Articles of association are usually the model articles unless you need something bespoke. Afterwards, register the company for Corporation Tax with HMRC within three months of starting to trade.

Filing annual accounts at Companies House within nine months of your year end, a Company Tax Return with HMRC within twelve months, a confirmation statement each year, and keeping proper accounting and statutory records. Beyond the filings sit the general duties in the Companies Act: to promote the success of the company, exercise reasonable care and skill, avoid conflicts and not to trade while insolvent. Missing filing deadlines brings automatic penalties on the company. Continuing to trade when you know the company cannot pay its debts can bring personal liability.

It can be, but far less dramatically than it used to be. The gap narrowed as Corporation Tax rose to 25% with marginal relief and dividend rates increased, and against any saving you must weigh the extra cost of accounts, filings, payroll and the loss of privacy — your accounts and officers are public. Broadly, incorporation starts to make sense when profits consistently exceed what you need to draw personally, because retained profit is taxed once at company rates rather than as personal income. Run the numbers for your own figures rather than relying on a threshold someone quoted.

Broadly anyone holding more than 25% of the shares or voting rights, who can appoint or remove a majority of the board, or who otherwise exercises significant influence or control. PSCs must be identified, recorded on a public register at Companies House and kept up to date within statutory time limits. It catches arrangements that are not obvious from the share register, such as an investor with veto rights or shares held on someone else's behalf. Failing to maintain the register accurately is a criminal offence rather than a filing fee, and it is being enforced more actively.

More than a sole trader, and it splits into a fixed part and a variable one. The fixed part is small and knowable: since 1 February 2026 Companies House charges £50 for the annual confirmation statement filed online, or £110 on paper, and incorporation itself costs £100 online, £124 on paper or £156 for same-day. The variable part is where the money actually goes — accountancy fees for statutory accounts and the Corporation Tax return, payroll if you take a salary, and your own time on the extra administration. Against all of that, weigh any tax saving and the value of limited liability. Where the numbers are marginal — profits below what you need to live on — the company usually costs more than it saves. Do that calculation before you incorporate.

You can, but it will appear on the public register indefinitely and cannot easily be removed once filed. Since March 2024 every company must have an "appropriate address" where documents can be delivered and acknowledged, so a PO box no longer qualifies. Using an accountant's or formation agent's address keeps your home off the register, but statutory post then arrives with them, so the arrangement only works with reliable forwarding. Note that your service address as a director is separate from the company's registered office, and both are public.