How to Register a Limited Company UK: The Complete Step-by-Step Guide

You have decided to incorporate. You are ready to move from sole trader to director, or you are starting your first business and want the limited liability and tax planning a company gives you. The question is simple: how to register a limited company UK in a way that sets you up properly from day one.

This guide answers that question. It is written for UK directors, contractors, freelancers, and small business owners who want to incorporate with confidence. We are ICAEW-qualified accountants. We have helped hundreds of businesses through this process. The registration itself takes 15 minutes online. The decisions you make during those 15 minutes affect your tax bill, your personal liability, and your ability to raise investment for years to come.

We cover every step: choosing your company name, selecting your SIC code, appointing directors and a PSC register, deciding on share structure, registering for Corporation Tax, and what happens after you get your company number. We include worked examples, a comparison table of share types, and an action checklist for your first 90 days as a director.

This is not legal advice. It is general guidance from practising accountants. You should speak to a qualified accountant before finalising your share structure or making any tax-critical decisions.

What Does It Mean to Register a Limited Company UK?

A limited company is a separate legal entity. It is distinct from you as an individual. The company owns assets, incurs debts, enters contracts, and pays tax in its own name. Your personal liability is limited to the value of your shares, usually £1 each. If the company fails, creditors cannot pursue your personal house, car, or savings.

That separation is the core reason most business owners incorporate. But it comes with obligations. A limited company must file annual accounts with Companies House, submit a Corporation Tax return (CT600) to HMRC, maintain statutory registers, and follow the Companies Act 2006. You are a director now. You have legal duties, to the company, to its shareholders, and to HMRC.

When you register a limited company UK, you are creating a new legal person. Treat the process with the seriousness it deserves.

Limited Company vs Sole Trader vs Partnership

The table below summarises the key differences. Use it to check whether incorporation is right for you.

Factor	Sole Trader	Partnership	Limited Company
Legal status	You are the business	Jointly liable	Separate legal entity
Personal liability	Unlimited	Unlimited (joint and several)	Limited to share value
Tax on profits	Income Tax + NI	Income Tax + NI (each partner)	Corporation Tax (19% or 25%)
Tax on drawings	Already taxed via profits	Already taxed via profits	Dividend tax + salary NI
Accounts filed publicly	No	No (unless LLP)	Yes (at Companies House)
Pension options	Personal contributions	Personal contributions	Employer contributions (deductible)
IR35 relevance	N/A	N/A	Key factor for contractors

If you are a contractor working through an agency, a limited company is almost certainly the right structure, provided you are outside IR35. If you are a sole trader turning over more than £50,000 in profit, incorporation usually saves you tax. If you are a small retailer turning over £30,000 with low margins, staying as a sole trader may be simpler and cheaper. There is no single right answer. Your accountant should run the numbers for your specific situation.

Before You Register: What You Need to Decide

Do not open the Companies House portal until you have made these decisions. Changing them later costs time and money.

Company Name

Your company name must be unique. Companies House will reject any name that is the same as an existing company. It will also reject names that are too similar, "Smith's Bakery Ltd" and "Smiths Bakery Ltd" are considered the same. Use the Companies House name availability checker before you start.

Certain words require approval. "Bank", "Insurance", "Royal", "Charity", "University", these and many others need a letter of non-objection from a regulatory body. Most small businesses avoid these words entirely.

Sensitive words also trigger extra scrutiny. Anything implying connection to government, the Crown, or a professional body needs evidence. If you are a contractor, do not use "Chartered" in your name unless you are personally a member of the relevant institute.

Your name must end with "Limited" or "Ltd". "Cyfyngedig" (Welsh) or "ccc" are also acceptable but uncommon.

Registered Office Address

Your registered office is the official address for legal correspondence. Companies House and HMRC will send statutory mail there. It must be a physical address in the UK, not a PO Box. It appears on the public register.

Many small business owners use their home address. That is legal. But your home address becomes public. If privacy matters, use your accountant's address or a registered office service. We offer this to our clients. Your registered office address can be different from your trading address.

SIC Code

The Standard Industrial Classification (SIC) code describes your business activity. You need at least one. You can use up to four. Choose the one that most closely matches your main business activity.

Common SIC codes for small businesses include:

• 62020, Information technology consultancy activities
• 70229, Management consultancy activities (other)
• 41100, Development of building projects
• 47910, Retail sale via mail order houses or via Internet
• 43210, Electrical installation
• 68320, Management of real estate on a fee or contract basis

Get this right. Your SIC code determines which industry statistics you appear in, and some lenders and investors check it. You can change it later, but it is easier to choose correctly at incorporation.

Directors and Company Secretary

Every limited company needs at least one director. A director is an individual, there is no corporate director option for private companies. Directors must be at least 16 years old. They cannot be disqualified from being a director or an undischarged bankrupt (unless they have court permission).

You do not need a company secretary. Most small companies do not have one. If you appoint one, they have statutory responsibilities for filing and record-keeping. It is simpler to leave this role unfilled and handle the duties yourself or through your accountant.

People with Significant Control (PSC Register)

Every company must maintain a register of people with significant control. A PSC is anyone who:

• Owns more than 25% of the company's shares
• Holds more than 25% of the voting rights
• Has the right to appoint or remove the majority of the board
• Otherwise exercises significant influence or control

If you are the sole director and sole shareholder, you are the PSC. Your name, month and year of birth, nationality, country of residence, and nature of control will appear on the public register. This is not optional.

Share Structure

This is the most important decision you will make at incorporation. It determines who owns the company, how profits are distributed, and what happens when someone leaves.

Most small companies use Ordinary Shares. One class of share, one vote per share, one dividend per share. Simple. But there are alternatives:

Share Type	Voting Rights	Dividend Rights	Capital Rights	Common Use
Ordinary	Full (1 vote per share)	Full	Full	Standard for most companies
Ordinary A	Full	Full	Full	Multiple shareholders, different dividend policies
Ordinary B	None	Full	Full	Family members, silent investors
Preference	None	Fixed dividend priority	Limited	Investors wanting income priority
Deferred	None	None until conditions met	Residual	Employee incentive schemes

If you are a single director-shareholder, issue 100 Ordinary Shares at £1 each. That gives you 100% ownership with £100 of share capital. Simple, clean, easy to manage.

If you have a co-founder, issue shares in proportion to ownership. 60/40, 50/50, 70/30, whatever you agree. But agree it in writing before you incorporate. A shareholders' agreement is strongly recommended for any company with more than one shareholder. It covers what happens if someone wants to leave, dies, or is removed. Without one, the default Companies Act rules apply, and they may not match your intentions.

If you plan to take investment, consider an option pool. Create 10-15% of shares as unissued but reserved for future employee share options. This avoids diluting existing shareholders later.

The Registration Process: Step by Step

You can register directly through the Companies House website for £50. Or you can use an incorporation agent for £10-£20 plus their fee. The agent route is faster if you want same-day incorporation. The direct route is fine if you are not in a rush.

Either way, the information you provide is the same.

Step 1: Set Up Your Companies House Account

Go to the Companies House online incorporation service. You need an email address and a phone number. You will verify your identity through the Companies House identity verification process, this is mandatory for all new directors from 2025 onwards.

Step 2: Enter Company Details

You will be asked for:

• Proposed company name
• Registered office address
• SIC code(s)
• Statement of capital (number and value of shares)
• Details of initial shareholders
• Details of initial directors
• Details of PSCs
• Whether you will use Model Articles or bespoke articles

Step 3: Choose Your Articles of Association

Model Articles are the default set of rules that govern how your company operates. They cover director powers, shareholder meetings, share transfers, and dividend declarations. For 95% of small companies, Model Articles are sufficient. They are standard, well-understood, and free.

If you need bespoke articles, for example, weighted voting rights, pre-emption rights on share transfers, or special dividend rules, you will need a solicitor to draft them. This adds cost and time. Only do it if your situation genuinely requires it.

Step 4: Pay and Submit

Pay the £50 fee (or £12 for same-day via an agent). Companies House processes the application. If everything is in order, you will receive your Certificate of Incorporation within 24 hours. This certificate contains your company number, date of incorporation, and registered office address. It is your company's birth certificate.

Step 5: Receive Your Company Number

Your company number is an 8-digit identifier. You will use it for every interaction with Companies House and HMRC. Memorise it, save it in your phone, and keep the certificate safe. You will need the company number to register for Corporation Tax, open a business bank account, and file your first set of accounts.

After Incorporation: What You Must Do Next

Your company exists. Now the real work begins.

Register for Corporation Tax

HMRC does not know your company exists just because Companies House does. You must actively register for Corporation Tax. You have three months from the date your company starts trading, or from incorporation, whichever is earlier, to do this. Miss the deadline and you face a penalty.

Registration is done through the HMRC online portal. You will need your company number, registered office address, and the date your first accounting period ends. Your first accounting period starts on the date of incorporation and ends on your chosen accounting reference date. Most companies choose 31 March, 30 April, or 31 December. Your Corporation Tax return (CT600) is due 12 months after the end of the accounting period. Payment is due 9 months and 1 day after the end of the accounting period.

Open a Business Bank Account

Your company must have its own bank account. Do not trade through your personal account. The company is a separate legal person, its money is not your money. Mixing the two creates accounting nightmares and risks piercing the corporate veil.

High Street banks (Barclays, NatWest, HSBC, Lloyds) all offer business accounts. Digital banks (Starling, Tide, Monese, Revolut) are faster to open and often cheaper. You will need your Certificate of Incorporation, company number, and proof of identity for all directors.

Set Up Payroll

If you are paying yourself a salary, and you should consider it, you need a payroll system. Register as an employer with HMRC. You can do this online. You will receive an employer PAYE reference number.

You can run payroll yourself using software like BrightPay or through your accountant. Most small company directors take a salary at the NI primary threshold (£12,570 for 2025/26) to avoid paying employee NI and Income Tax, while still building NI credits for state pension purposes. The company gets a Corporation Tax deduction for the salary.

You must report payroll to HMRC in real time, before you pay your employee (which includes yourself as a director). This is Real Time Information (RTI). Miss a report and you face a penalty.

Register for VAT (If Needed)

If your company's taxable turnover exceeds £90,000 in any rolling 12-month period, you must register for VAT. You can register voluntarily below this threshold, many businesses do to reclaim VAT on their costs.

VAT registration is done through the HMRC online portal. You will choose a VAT scheme: standard accounting, flat rate, annual accounting, or cash accounting. Each has different rules and cash flow implications. Read our guide on VAT and Making Tax Digital for the full picture.

From April 2026, Making Tax Digital for Income Tax Self Assessment (MTD ITSA) will be mandatory for sole traders and landlords with income over £50,000. Limited companies are not directly in scope for MTD ITSA, but they are in scope for MTD for VAT. If you are VAT-registered, you must use MTD-compatible software (Xero, QuickBooks, FreeAgent, Sage) to file your VAT returns.

Keep Statutory Registers

Your company must maintain:

• Register of members (shareholders)
• Register of directors
• Register of directors' residential addresses (not publicly accessible)
• Register of PSCs
• Register of charges (if you have loans secured against company assets)

These can be kept in hard copy or electronically. Many companies hold them at their registered office. Your accountant can hold them for you. They must be available for inspection by any member of the public who requests to see them (with some exceptions for residential addresses).

Worked Example: Sarah Incorporates Her Consultancy

Sarah is a management consultant in Bristol. She has been a sole trader for three years, turning over £84,000 with profits of £63,400. Her accountant recommends incorporation.

Sarah decides to register a limited company UK. She chooses the name "Stokes Croft Consulting Ltd" after checking availability on Companies House. Her SIC code is 70229 (management consultancy). She uses her accountant's office in Harbourside as her registered office address, she values her privacy.

Sarah is the sole director and sole shareholder. She issues 100 Ordinary Shares at £1 each. She uses Model Articles. She registers online at Companies House for £50 and receives her certificate the next day.

Her company number is 12345678. She registers for Corporation Tax within three months. She opens a business account with Starling. She sets up payroll through her accountant, taking a salary of £12,570 per year. The remaining profit of £50,830 (after employer NI and other costs) is available for dividends.

Sarah's total tax bill as a director-shareholder is lower than it was as a sole trader. She saves approximately £4,200 in NI and Income Tax in her first year. Her accountant files her first CT600 and confirms her dividend paperwork is in order.

Sarah's story is typical. Incorporation works well for profitable consultants, contractors, and freelancers. It works less well for businesses with low margins, high personal drawings, or complex ownership structures.

Share Structure Decisions: Getting It Right at Incorporation

Your share structure is not just about ownership. It affects tax planning, exit strategy, and investor relations.

Single Shareholder

Issue 100 Ordinary Shares at £1 each. Total share capital: £100. You own 100%. You control all decisions. You declare dividends at your discretion. This is the simplest structure and the one we recommend for most contractors and solo business owners.

Multiple Shareholders

Issue shares in proportion to ownership. If you and a co-founder are 60/40, issue 60 shares to you and 40 to them. Consider creating different share classes if you want different dividend rights. For example, you might issue Ordinary A shares to working directors and Ordinary B shares to silent investors who do not need voting rights.

Employee Share Schemes

If you plan to give shares to employees, consider an Enterprise Management Incentive (EMI) scheme. EMI options allow employees to acquire shares at a future date at a fixed price, with favourable tax treatment. You need to set this up correctly at incorporation or shortly afterwards. Your accountant can advise on R&D tax credits if your company is developing new products or processes.

Shareholder Agreements

For any company with more than one shareholder, a shareholders' agreement is essential. It covers:

• How decisions are made
• What happens if a shareholder wants to sell
• Drag-along and tag-along rights
• Pre-emption rights on new share issues
• Dispute resolution mechanisms
• What happens on death or incapacity

Without a shareholders' agreement, the default Companies Act rules apply. These may not reflect your commercial arrangement. A solicitor should draft the agreement. It costs £500-£2,000 depending on complexity. It is money well spent.

Common Mistakes When Registering a Limited Company UK

We see the same errors repeatedly. Avoid them.

Using a Personal Address as Registered Office

Your registered office is public. Anyone can search Companies House and find your home address. If you run your business from home, use your accountant's address or a registered office service. It costs £50-£100 per year and protects your privacy.

Choosing the Wrong SIC Code

A generic SIC code like "70229" (management consultancy) is fine for most consultants. But if you are a software developer, use "62020". If you are a builder, use "41201" or "43210". The wrong code can cause problems with lenders, insurers, and HMRC.

Not Registering for Corporation Tax on Time

You have three months from the start of trading. Many new directors forget. HMRC sends a penalty notice. The penalty starts at £100 and increases with each month of delay. Set a calendar reminder the day you receive your Certificate of Incorporation.

Mixing Personal and Business Finances

Do not use your personal bank account for company transactions. Do not pay company bills from your personal account. Do not transfer money between accounts without proper documentation. The company is separate. Treat it that way.

Ignoring the PSC Register

You must identify and record your PSCs at incorporation. If you are the sole shareholder, you are the PSC. If you have a co-founder who owns 30%, they are a PSC. If you have a silent investor who owns 26%, they are a PSC. Failure to maintain the PSC register is a criminal offence.

Action Checklist: Your First 90 Days as a Director

Use this checklist to stay on track after incorporation.

• Day 1: Receive Certificate of Incorporation. Save it securely.
• Day 1: Register for Corporation Tax with HMRC.
• Day 1: Open a business bank account.
• Day 1: Set up your accounting software (Xero, QuickBooks, FreeAgent, Sage).
• Day 1-7: Register as an employer with HMRC for PAYE.
• Day 1-7: Set up payroll and process your first salary payment.
• Day 1-30: Register for VAT if turnover exceeds £90,000 or if voluntary registration is beneficial.
• Day 1-30: Appoint an accountant if you have not already done so.
• Day 1-30: Draft a shareholders' agreement if you have multiple shareholders.
• Day 1-90: File your first Confirmation Statement (due within 12 months of incorporation, but set a reminder now).
• Day 1-90: Set up a system for recording expenses, invoices, and receipts.
• Day 1-90: Review your director pay and dividend strategy with your accountant.

Your accountant can handle most of these steps for you. We do this for clients across the UK, from Shoreditch startups to Glasgow consultancies to Birmingham construction firms. The cost of professional support is usually recovered many times over in tax savings and avoided penalties.

Costs of Registration and Ongoing Compliance

Registration costs £50 directly through Companies House. Using an incorporation agent costs £10-£20 plus their fee (typically £10-£30). Same-day incorporation through an agent costs £30-£50 total.

Ongoing costs include:

• Annual Confirmation Statement: £34 (filed online with Companies House)
• Annual accounts preparation: £500-£2,000 depending on complexity (your accountant's fee)
• Corporation Tax return filing: usually included in the accounts fee
• Payroll processing: £50-£200 per year if done by your accountant
• VAT returns: £100-£500 per year if you are VAT-registered
• Registered office service: £50-£150 per year
• Accounting software: £10-£50 per month (Xero, QuickBooks, FreeAgent)

Total annual compliance costs for a straightforward company: £1,000-£2,500. This is tax-deductible against Corporation Tax.

When You Should Not Register a Limited Company

Incorporation is not always the right answer.

If your profit is below £20,000, the tax savings from incorporation are small. The additional compliance costs and administrative burden may outweigh the benefits. Stay as a sole trader.

If you are in a high-risk industry with significant personal injury claims (construction, manufacturing, transport), limited liability is valuable. But your insurer may still require personal guarantees on loans or leases. The protection is not absolute.

If you plan to sell the business within two years, the timing of incorporation matters. Business Asset Disposal Relief (BADR) gives a 14% CGT rate on the first £1 million of gains (rising to 18% from 6 April 2026). But you must have held the shares for at least two years and been an officer or employee. If you incorporate and sell within two years, you lose BADR.

If you are a contractor inside IR35, the tax advantage of a limited company is largely eliminated. You pay tax on your deemed employment income at Income Tax and NI rates. The company still has filing obligations. Many contractors inside IR35 operate through umbrella companies instead.

Final Thoughts: The Professional Approach

Registering a limited company UK is a 15-minute online process. Building a properly structured, tax-efficient, legally compliant company takes longer. The decisions you make at incorporation, share structure, registered office, SIC code, articles, have consequences that last the entire life of the business.

Do not rush. Use the checklist. Ask questions. And if you are unsure about any aspect of the process, speak to a qualified accountant before you click submit. The cost of a 30-minute consultation is trivial compared to the cost of fixing a mistake after incorporation.

We work with UK business owners across every sector and every location, from sole traders in Liverpool's Baltic Triangle to limited companies in Edinburgh's Old Town to partnerships in Sheffield's Kelham Island. If you need help with incorporation, share structure, or your first year of compliance, get in touch.