How to set up as a private limited company

Get Registered and Make it Official

To set up a private limited company, you must register it with Companies House. This process, known as 'incorporation', officially creates your business as a distinct legal entity. The biggest advantage is 'limited liability', which means your personal assets, like your home, are protected if the business runs into debt. It also boosts your credibility with clients and suppliers, and is essential if you plan to seek investment.

What You'll Need Before You Start

Getting your information in order before you start the registration process will save you a lot of time. Here’s a checklist of what you’ll need to decide:

1. A Company Name: Your chosen name must be unique and cannot be offensive or contain certain sensitive words without permission. The first thing to do is check the official Companies House register to see if your desired name is available.
2. A UK Registered Office Address: This is your company's official address, where all statutory mail will be sent. It must be a physical address in the UK and it will be publicly available online. You can use your home address, but for privacy, many new businesses use a virtual office or their accountant's address.
3. At Least One Director: A director is responsible for the day-to-day running of the company. You must have at least one, and they must be 16 or over. You'll need their full name, date of birth, nationality, occupation, and residential address.
4. At Least One Shareholder: A shareholder owns the company. For most new businesses, the director and the shareholder are the same person. You'll need to decide how many shares the company will have and what their value is (e.g., 100 shares at £1 each). This is known as your 'share capital'.
5. A SIC Code: This stands for Standard Industrial Classification code. It's a five-digit number that describes your company's business activities. You can choose up to four. You can find a full list of SIC codes on the GOV.UK website.
6. Memorandum and Articles of Association: These documents outline the rules for running your company. When you register online, you can use the standard 'model articles' provided by the government, which is suitable for the vast majority of new businesses.

The Registration Process

The quickest, cheapest, and most common way to register your company is online via the GOV.UK website. The fee is minimal (around £12) and your company is typically registered within 24 hours.

1. Navigate to the official 'Set up a limited company' page on the GOV.UK website.
2. Follow the clear, step-by-step instructions, entering the details you prepared from the checklist above.
3. Pay the registration fee at the end of the application.
4. Once approved, Companies House will email you a Certificate of Incorporation. This is your company's official birth certificate and includes your unique Company Registration Number (CRN).

You're Incorporated! What Now?

Congratulations, your company legally exists! Your next, very important step is to register for Corporation Tax with HMRC. You must do this within three months of starting to do business (e.g., buying, selling, or advertising). The online registration process with Companies House often registers you for Corporation Tax at the same time, but it is your legal responsibility to ensure this has been done.

Your Ongoing Responsibilities

Running a limited company comes with ongoing legal duties. Failing to meet these deadlines can result in fines or even your company being struck off the register. The main duties include:

• Filing a Confirmation Statement with Companies House each year.
• Filing Annual Accounts with Companies House each year.
• Filing a Company Tax Return and paying Corporation Tax to HMRC.
• Keeping detailed company records, such as a register of 'people with significant control'.

Top Tip: While you can manage these duties yourself, many new business owners hire an accountant. An accountant can handle the company formation for you and ensure you meet all your financial and legal deadlines, leaving you free to focus on growing your business.