Running a Limited Company in the UK: Setup, Tax and Director Essentials

How to Set Up a Ltd Company UK

Step-by-step guide to registering a limited company. What you need, how to file with Companies House, and what happens after incorporation.

· · 4 min read

Self-employment tax and business information is based on current HMRC rules. This is not tax or accounting advice. Consider consulting a qualified accountant for your specific circumstances.

If you are deciding whether to incorporate, how to pay yourself, and how to stay compliant as a director, start with the Limited Company Hub.

A complete guide to forming your own limited company in the UK.

Before You Start

Is a Ltd Company Right?

Ltd Company Sole Trader
Limited liability Personal liability
More tax options Simpler tax
More admin Less paperwork
Professional image Personal
Often tax efficient £30k+ Simpler below £30k

What You’ll Need

Requirement Details
Company name Unique, follows rules
Registered address UK address
Director At least one, 18+
Shareholder At least one
SIC code Business activity
Share structure Usually simple

Step 1: Choose Your Company Name

Name Rules

Rule Details
Must be unique Check Companies House
Cannot be offensive HMRC can reject
Cannot imply Government connection
‘Sensitive’ words Need approval
Must end with Limited or Ltd

Check Availability

Step Action
1 Go to find-and-update.company-information.service.gov.uk
2 Search proposed name
3 Check no exact match
4 Check similar names
5 Consider trademark too

Sensitive Words

Word Type Examples
Professional Chartered, Trust
Government Council, Authority
Financial Bank, Insurance
Royal Royal, Prince
Need approval From relevant body

Step 2: Registered Office Address

Options

Option Pros Cons
Home address Free Public record
Accountant’s address Professional May charge
Virtual office Private Monthly cost
Business premises Professional If you have one

Important Notes

Consideration Details
Public record Address is visible
Official correspondence Goes here
Can change After incorporation
Must be UK England/Wales or Scotland

Step 3: Appoint Directors

Director Requirements

Requirement Details
Minimum age 18
Number needed At least 1
Nationality Any
UK resident Not required
Not disqualified Cannot be banned director

Director Information Needed

Information Provided
Full name Including middle names
Date of birth Day shown publicly
Nationality
Occupation
Service address Can differ from home
Home address Kept private

Director Responsibilities

Duty What It Means
Act in company’s interest Not personal interest
Exercise reasonable care Be competent
Avoid conflicts Declare interests
Not accept benefits From third parties
Declare interests In transactions

Step 4: Shareholders and Shares

Simple Share Structure

Element Typical Setup
Share capital £1 to £100 common
Number of shares 1 to 100
Share value £1 each typical
Shareholders Directors often

Example Structures

Setup Details
Sole owner 1 share at £1
Two equal partners 50 shares each at £1
Majority/minority 75/25 split

Shareholder Information

Required Details
Full name Or company name
Address
Share class Usually ‘ordinary’
Shares held Number

Step 5: SIC Codes

What They Are

SIC Code Purpose
Standard Industrial Classification Describes business
Required For registration
Multiple allowed If relevant

Common SIC Codes

Business Type SIC Code
IT consultancy 62020
Management consultancy 70229
Web design 62012
Retail online 47910
Construction 41100
Accountancy 69201

Find Your Code

Step Action
1 Go to gov.uk/government/publications/standard-industrial-classification-of-economic-activities-sic
2 Search your activity
3 Note the 5-digit code

Step 6: Register Online

Direct with Companies House

Step Action
1 Go to gov.uk/register-a-company-online
2 Create account
3 Start new application
4 Enter company name
5 Add registered office
6 Add director details
7 Add shareholder details
8 State share capital
9 Add SIC codes
10 Accept model articles
11 Pay £50 (standard) or £80 (same-day)

Via Formation Agent

Agent Service
Formation agents Handle paperwork
Often cheaper £10-50 basic
Include extras Registered address, templates
Popular ones 1st Formations, Rapid Formations

Costs Comparison

Method Cost
Companies House direct £50
Same-day service £80
Formation agent basic £10-50
Agent with extras £50-200

Step 7: After Incorporation

You’ll Receive

Document Details
Certificate of Incorporation Official proof
Company number 8-digit identifier
Authentication code For filing

Immediate Actions

Priority Action
1 Open business bank account
2 Register for Corporation Tax
3 Consider VAT registration
4 Set up accounting
5 PAYE if employing

Ongoing Obligations

Annual Requirements

Requirement Deadline
Confirmation Statement Annually (£34)
Accounts filing 9 months after year end
Corporation Tax return 12 months after year end
Corporation Tax payment 9 months + 1 day

Records to Keep

Record Retention
Accounting records 6 years
Directors’ details Current + 10 years
Shareholder register Indefinite
Minutes of meetings Indefinite

Register for Taxes

Corporation Tax

Action Details
Register Within 3 months of starting
Online gov.uk/register-for-corporation-tax
Unique Tax Reference HMRC will send

VAT

Must Register If Threshold
Turnover exceeds £90,000 (2024/25)
Voluntary Can choose below

PAYE

If Register
Paying yourself salary Yes
Employing others Yes
Deadline Before first payment

Summary

Step Action Cost
1 Choose unique name Free
2 Decide registered address Free/varies
3 Appoint directors Free
4 Set up shares Free
5 Find SIC codes Free
6 Register online £50-80
7 Post-registration setup Varies
After Incorporation Priority
Business bank account Immediate
Corporation Tax registration Within 3 months
Accountant Recommended
Proper bookkeeping From day one

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Sources

  1. Companies House
  2. GOV.UK — Set up a limited company