How to set up a limited company in the UK: a complete 2026 guide

Forming a limited company is the part of starting a business that feels most daunting, and it's actually the simplest. The real work comes afterwards. This guide walks you through every decision you'll make during a Companies House registration – the name, the address, the share structure, the SIC codes, the PSC register – and explains what each one actually means, so you can fill in the form without second-guessing yourself.

Is a limited company right for you?

The short version: a limited company is the right structure if you want a separate legal entity between you and the business, either because your liability exposure is real, because your clients prefer contracting with a company, or because you're earning enough that the tax treatment is meaningfully better than sole trader. Still deciding between sole trader and limited? The sole trader vs limited comparison walks through the trade-offs in detail with worked examples at three profit levels; this guide assumes you've made the call and want to actually set one up.

Quick filters on whether limited is your structure. You should probably form a limited company if you want genuine protection for personal assets (house, savings) against business debts; your clients require a company to contract with; you expect to bring on a co-founder or investor; you want to retain profit inside the business for future years; or you want to make substantial employer pension contributions. You probably shouldn't form a limited company if your profits are well below £30,000 a year, you've no employees and no plans to hire, your liability exposure is minimal, and you hate admin.

If you're a contractor specifically, the umbrella vs limited company decision has extra considerations around IR35 that apply before you incorporate.

What you'll need before you start

Companies House's online incorporation service takes about half an hour if you have everything ready and know what you're doing. Gather the following before you start:

• A proposed company name (with two or three backups in case the first choice is taken).
• A UK registered office address that meets the appropriate address rule introduced in March 2024.
• At least one director – their full name, date of birth, nationality, occupation, country of residence, and service address.
• At least one shareholder – can be the same person as the director.
• Identity of each Person with Significant Control (PSC) – typically anyone holding more than 25% of shares or voting rights.
• Up to four SIC codes that describe what the company does.
• A Government Gateway account (create one if you don't have it).
• A debit or credit card for the £100 fee.
• Three pieces of personal information for each director to confirm identity: from a list including National Insurance number, mother's maiden name, passport number, town of birth, telephone number, and father's first name.

Choosing a company name

Getting the name right matters because you'll live with it a long time, and changing it later is possible but fiddly. Three tests to apply in order.

Is it legally available? Check Companies House directly at find-and-update.company-information.service.gov.uk. Your name must not be the "same as" an existing registered company, and mustn't be "too similar" to one in a way that would mislead. A full list of the "same as" disregards (Ltd, Limited, The, 2, etc.) is on the Companies House guidance page.

Does it need permission? Some words are restricted. "Bank", "architect", "solicitor", "charity", "British", "King", "Royal", "Chartered", "Association", "University" and others appear on the sensitive words list and require a supporting letter from the relevant regulator or government body. The full list is on the gov.uk Incorporation and names guidance. If your first-choice name triggers one, expect a delay while you get the letter; or pick a name that doesn't trigger the list.

Is it trademark-safe and domain-available? Companies House availability isn't the same as trademark availability. Search the Intellectual Property Office register at gov.uk/search-for-trademark before you commit. Check domain availability at the same time – registering a company name that matches a .co.uk or .com domain you can't acquire is a marketing headache waiting to happen.

The name must end with "Limited" or the abbreviation "Ltd" (or the Welsh equivalents "Cyfyngedig" or "Cyf"). You can use both the full and abbreviated forms interchangeably in trading. Some characters are prohibited; the full list of permitted characters is on the incorporation guidance page.

Choosing your registered office address

The registered office is the official address for Companies House, HMRC, and legal correspondence. Three practical rules apply.

First, it must be in the UK jurisdiction you've chosen. England and Wales, Scotland, or Northern Ireland – you pick on incorporation, and you can't change to a different jurisdiction later. Most companies register in England and Wales.

Second, since 4 March 2024 it must be an "appropriate address". Someone acting for the company must receive and acknowledge any mail delivered there; PO boxes on their own are no longer acceptable. This was part of the Economic Crime and Corporate Transparency Act and plugged a hole that had enabled fraudulent companies to disappear behind untraceable addresses.

Third, it's public. Anyone can look up your registered office on Companies House forever, even if you later change it (the old address stays in the filing history). For founders operating from home, that's a privacy concern worth solving with a service address. Formation agents, accountants, and dedicated providers offer UK service addresses for typically £30–£90 a year.

Appointing directors

A private limited company needs at least one director who is a natural person over the age of 16. You can have as many more directors as you like, including corporate directors (other companies acting as director), though current legislation requires at least one individual natural-person director at all times.

Each director's record at Companies House includes: full name, date of birth, nationality, occupation, country of residence, and a service address (which appears on the public register) plus their usual residential address (which goes into the private section of the register, visible only to specified enforcement bodies).

Directors take on personal duties under the Companies Act 2006. The seven general duties are: act within powers, promote the success of the company, exercise independent judgement, exercise reasonable care and skill, avoid conflicts of interest, not accept benefits from third parties, and declare interests in proposed transactions. You won't need to memorise these, but you should understand that the role carries real responsibility – not just ceremonial.

Deciding share structure and shareholders

Most new owner-managed companies use the simplest possible structure: 100 ordinary shares of £1 each, all held by the founder. That gives you £100 of nominal share capital, a legal minimum met with comfortable headroom, and a clean 100-share canvas to bring on a co-founder or investor later without subdivision.

Three decisions to make explicit.

How many shares to issue. Issue enough that future transfers and new issues can be expressed in whole numbers at sensible percentages. 100 shares lets you transfer 1%, 5%, or any multiple easily. 1,000 shares gives you tenth-of-a-percent resolution, useful if you plan precise shareholder arithmetic. Don't issue just one share; it creates friction later when you want to bring anyone in.

What class of shares. For most new companies, "ordinary shares" is the right answer – one class, equal rights per share. Different classes (preferred, A, B, alphabet shares) make sense only if you have a specific reason: investor rights, spouse dividend planning with separate classes, or structured voting. Start simple; add complexity when you need it.

Who holds them. If you're the sole founder, you hold all 100. If you're forming with a co-founder, allocate according to whatever you've agreed – often a simple 50/50, but decide and document. If your spouse is a shareholder for tax planning, the arrangement must be genuine with real shares, real dividends paid to their account, and real rights; HMRC's settlements legislation catches artificial income-splitting schemes.

Choosing SIC codes

SIC codes classify your company's activity. You choose up to four on incorporation, and update them annually on the confirmation statement. The codes don't restrict what you can do – you can trade outside them without penalty – but they do drive statistics, some bank onboarding questions, and occasionally insurance categorisation.

The full list is at resources.companieshouse.gov.uk/sic. It's exhaustive and sector-specific. A few catch-all codes exist when nothing else quite fits – 74990 ("other professional, scientific and technical activities"), 82990 ("other business support service activities"), and 70229 ("management consultancy activities other than financial management") cover a lot of ground. Pick codes that most accurately describe your main activity first, then fill remaining slots with secondary activities. Two or three specific codes beats one generic code.

PSC register explained

The People with Significant Control register records anyone who meaningfully controls the company. Companies House needs the details on incorporation and uses them for transparency and anti-fraud purposes. Five PSC conditions apply – a person is a PSC if any one is true:

1. They hold more than 25% of the shares.
2. They hold more than 25% of the voting rights.
3. They have the right to appoint or remove a majority of the board.
4. They otherwise exercise significant influence or control.
5. They control a trust or firm that itself meets any of the above.

For most new owner-managed companies, the sole founder is the only PSC (they hold 100% of shares and voting rights). In a two-founder 50/50 company, both are PSCs. If there's genuinely no one over 25%, you still have to report that explicitly; you don't just leave the register blank.

Keep the PSC register current whenever shareholdings or control arrangements change; updates must be filed at Companies House within 14 days of the change.

Step-by-step: registering through Companies House

Head to gov.uk/limited-company-formation and pick "Register a private limited company online". The flow below is what you'll see.

1. Sign in at gov.uk/limited-company-formation. Sign in with your Government Gateway user ID, or create one if you don't have it.
2. Enter the proposed company name and check availability. Type your chosen name. The system checks availability against Companies House records, the sensitive words list, and the same-as/too-similar rules.
3. Enter the registered office address. Provide a UK address in your chosen jurisdiction that meets the appropriate address rule.
4. Add directors' details. Full name, date of birth, nationality, occupation, country of residence, and a service address. Home addresses are collected but go to the private section of the register.
5. Add shareholders and allocate shares. Name and shareholding for each. Most new companies issue 100 ordinary shares of £1 each, all to the founder.
6. Add Persons with Significant Control (PSC). Usually just the founder for owner-managed companies.
7. Choose SIC codes. Up to four. Most accurate-first, then secondary.
8. Confirm the Memorandum and Articles. Most founders accept the default Model Articles for private companies limited by shares. If you have specific reasons to customise (investor rights, alphabet shares, custom voting), file bespoke Articles instead – but expect Companies House to scrutinise them.
9. Pay the fee and submit. £100 by debit or credit card. Companies House aims to process most online filings within 24 hours and emails the certificate of incorporation on approval.

Registering through a formation agent

Formation agents are private companies that submit your incorporation paperwork to Companies House on your behalf, often bundled with useful extras. The direct route (gov.uk) costs £100 and takes 30 minutes. Formation agents typically charge £20 to £150 for a basic package, and that usually includes a service address (valuable for home-based founders), a bank introduction, some templates for share certificates and board minutes, and possibly a year's registered office mail forwarding.

When a formation agent is worth the money: you want a service address bundled in; you need a same-day incorporation and don't want to deal with filing software yourself; you want non-standard Articles; you have complex shareholdings (multiple classes, corporate shareholders, deferred shares); or you simply prefer a human to double-check the paperwork.

When direct is fine: one director, one shareholder, a name you've already checked, a home or known UK address to register at, and a straightforward trade. Save the £20–£150, spend thirty minutes on gov.uk, and you're done.

What it costs

Companies House fees are the baseline, unchanged since the fee rise on 1 February 2026.

• Online incorporation: £100.
• Paper incorporation (IN01): £124, processed within 8–10 working days.
• Same-day online incorporation via software filing: £156 (not available via the standard gov.uk route).
• Annual confirmation statement: £50 online (£110 on paper).
• Change of name (NM01): £20 online.
• Voluntary strike-off (DS01): £13 online (£18 on paper).

On top of those statutory fees, most owner-managed companies spend £600–£1,500 a year on accountancy fees, £30–£90 a year on a service address if using one, and possibly £20–£50 a year on domain and email. Budget around £700–£1,800 a year in total fixed costs before doing any tax calculations. If you're going to register for VAT, you may also need to register for VAT and file quarterly returns, which most accountants include in their standard package.

What you get once registered

Companies House emails your certificate of incorporation as soon as the filing is accepted, usually within 24 hours. The certificate shows the company name, company number (eight digits, unchangeable), date of incorporation, and jurisdiction. That's your legal proof that the company exists.

You'll also receive:

• Your company registration number (CRN) – used on every filing and official document for the rest of the company's life.
• Automatic registration for Corporation Tax with HMRC (a UTR is issued by HMRC by post 1–2 weeks later, to your registered office).
• Your Memorandum of Association – automatically generated during the online filing.
• Your Articles of Association – defaults to Model Articles unless you supplied bespoke ones.
• Access to your public Companies House record, updatable via the online service.

Nothing else arrives immediately. The authentication code you need to file future Companies House documents comes by post to the registered office within a few days – keep it safe, you'll need it for every future filing.

What to do immediately after

The registration is the quick bit. The first 30 days after incorporation have a predictable checklist worth following carefully – HMRC registration, banking, accounting software, VAT, insurance, and the rest. Read our 30-day post-registration checklist for the step-by-step; it's the natural next stop after this guide.

The highlights: register for Corporation Tax with HMRC within three months of starting to trade; open a business bank account; set up accounting software from day one; decide whether to register for VAT voluntarily; sort business insurance; and run your payroll and PSC register correctly from the start. Each of these has quiet gotchas that the checklist walks through.

Frequently asked questions

The questions I get most often from people about to incorporate, answered plainly.

Authoritative sources: gov.uk Set up a limited company, Companies House fees, Name availability search, Incorporation and names guidance, SIC code list, IPO trade mark search.