How to Set Up a Limited Company UK — Timeline, Costs & 1st Formations Review

Quick Roadmap: From Idea to Incorporated

I know setting up a business feels daunting; our guide shows how to set up a limited company UK step-by-step, compares sole trader vs limited company pros and cons, explains registered office address, timelines, costs and formation agents, including 1st Formations.

Compare the core differences between operating as a sole trader and forming a limited company. Explain personal liability: as a limited director your liability is usually limited to unpaid shares; as a sole trader you remain personally liable for business debts. Explain tax treatment: sole traders pay income tax and National Insurance on profits; limited companies pay corporation tax, then directors/owners may take wages and dividends (different tax profile). Explain perception: clients often trust limited companies more. Explain admin and costs: limited companies face more ongoing filing, a registered office (what is a registered office address?) and accounting requirements; sole traders have simpler records and lower startup costs.

Assess whether incorporation pays off by comparing practical scenarios:

Check key triggers and next actions: review profit thresholds (common breakeven often falls in the £20k–£40k profit range), factor pension and tax planning, and consider IR35 if you contract through intermediaries. Consult an accountant, read comparisons like “best company formation agent uk” and a “1st Formations review”, and learn how long does it take to incorporate a company? (often 24 hours to a few days) before you decide.

Choose a clear, compliant company name. Check trademarks, Companies House for too‑similar names, and avoid sensitive words (e.g., “bank”, “insurance”) unless you have permissions. Example: search the IPO register and run a trademark check before you file.

Appoint directors and decide shareholders. Provide each director’s date of birth, service address (public), and usual residential address (kept off the public register for protection by using a service address). Decide if you’ll run a single‑director company (common for freelancers) or multiple directors, and whether to use nominee services for privacy or investor needs.

Decide your share structure. Choose between a single class (e.g., 100 ordinary shares) or multiple share classes for different rights (voting/dividends). Example: give founders ordinary shares and investors preference shares.

Designate a registered office. Answer: what is a registered office address? — it’s the public address for statutory mail (can be your formation agent’s address). Ensure it’s a UK address and able to receive official documents.

Choose SIC code(s) and articles. Pick appropriate SIC code(s) for your business activities. Adopt the model articles (fast and common) or draft custom articles if you need bespoke rules.

Prepare basic data for filing:

Decide small but important options (single director, nominee arrangements, multiple share classes) before you incorporate.

Compare the main formation routes and pick what fits your budget, speed need and support level.

Use Companies House (DIY): free–£12 (web). Turnaround: same day / within 24 hours online; postal slower (up to 10 days). Extras: none. Pros: cheapest, direct. Cons: no extras, no hand‑holding.

Choose 1st Formations: typical cost £12–£60 (packages £20–£120+). Turnaround: same day / 24 hours on online packages. Extras: registered office, mail forwarding, bank verification packs, nominee services. Pros: friendly packages, competitive pricing, lots of add‑ons; good for first‑timers. Caveats: upsells and varying processing tiers — check exactly what’s included before you pay. (1st Formations review: great entry packages and support, but read the fine print on “premium” vs standard speed.)

Choose Rapid Formations: costs £15–£100+. Turnaround: often same day. Extras: registered office, mail forwarding, bank packs. Pros: fast, slick UI. Cons: upsells and higher prices for complete packages.

Choose Companies Made Simple: costs £10–£80+. Turnaround: same day options. Extras and support similar; pros: transparent pricing; cons: fewer freebies.

Choose The Formations Company: costs £15–£90+. Turnaround: same day options. Extras: strong bank pack support. Pros: tailored bank verification help; cons: package complexity.

Choose based on: price (Companies House for minimum cost), speed (agents for same‑day handling and bank packs), ongoing support (agents for registered office, mail forwarding, and compliance reminders).

Confirm the company name and registered office address. Check Companies House rules (avoid sensitive words). Example: if you use 1st Formations, pick a package that includes a registered office or provide your own — remember: what is a registered office address? it’s the official contact for legal mail.

Prepare People and Shareholder info. List director(s), PSCs (persons with significant control) and initial shareholders with share classes and values. Gather ID and proof of address if a bank will need verification.

Choose the articles of association. Use standard model articles (often fine for small trading companies) or upload bespoke articles if needed.

Submit the application. Use the online Companies House form (same‑day or within 24 hours) or have an agent submit IN01 on your behalf. Ask the agent about bank verification packs — a common reason people choose the best company formation agent UK for speed.

Pay the fee. Pay Companies House online fee (usually £12) or your agent’s package fee (varies; agents often offer same‑day for extra cost).

Receive the Certificate of Incorporation and company number. Note: how long does it take to incorporate a company? Online: same day/24 hours; agent same‑day options; postal/paper: several days–weeks.

Register for Corporation Tax within 3 months of starting business. Set up statutory registers. Open a business bank account (banks may request certified documents). Register for VAT or PAYE if applicable.

File your annual Confirmation Statement (within 12 months) and pay Companies House fee (usually £13 online).

Prepare and file annual accounts and a Corporation Tax return. Register for corporation tax within 3 months of trading. Pay corporation tax (usually due 9 months + 1 day after the accounting period) and file the CT600 (usually within 12 months of the period end).

Keep accurate records and handle dividends correctly: declare dividends only from retained profits, record board minutes and dividend vouchers, and pay by bank transfer. Example: if your company makes £10,000 profit, ensure retained profit covers any dividend you pay and record the resolution in minute books.

Budget for ongoing costs:

• Confirmation statement: Companies House fee (≈£13)
• Annual accounts & CT600: filing (free online) and potential tax bill
• Accountant/bookkeeping: typical £300–£1,500+ pa depending on complexity
• Registered office service: renewal if you used one (≈£30–£150 pa)
• Payroll/VAT: software/submission costs if applicable

Keep costs down: use reputable accountant or cloud accounting software, shop for the best company formation agent UK bundles, and consider a formation package that includes helpful ongoing services (see the 1st Formations review and our five‑route comparisons for value and customer service).

Checklist — immediate post‑incorporation tasks:

• Open a business bank account
• Register for Corporation Tax
• Set up bookkeeping/software or hire an accountant
• Confirm your registered office arrangements (what is a registered office address?)

Ready to Incorporate?

Recap: weigh sole trader vs limited company pros and cons, prepare details including what is a registered office address?, pick a formation route (best company formation agent UK or DIY; 1st Formations review) and follow the timeline to incorporate now?