Starting your own business is an exciting venture, and in the UK, one of the most popular structures is a private limited company (Ltd). This structure offers financial protection for its owners (known as shareholders) and is a separate legal entity from the people who run it. If you’re considering setting up a UK Ltd company, here’s everything you need to know.
What is a Limited Company?
A Limited Company is a type of business structure where the company:
Is a legal entity separate from its owners.
Limits the financial liability of its shareholders to the amount they’ve invested.
Must be registered with Companies House (the UK’s company registrar).
There are two main types:
Private Limited Company (Ltd) – cannot offer shares to the public.
Public Limited Company (PLC) – can offer shares to the public (requires a minimum share capital of £50,000).
Most small businesses in the UK operate as private Ltd companies.
Step-by-Step: How to Set Up a UK Ltd Company
Choose a Company Name
Your company name must be:
Unique (check availability on the Companies House website)
Not offensive or misleading
Not too similar to an existing company name
Avoid restricted words unless you have permission (like “Royal”, “Bank”, or “Charity”)
Tip: You can also register a matching domain name if you plan to have a website.
Decide on Company Directors and Shareholders
You need at least one director aged 16 or over.
A company secretary is optional for private Ltd companies.
Shareholders can be individuals or other companies — one person can be both the sole director and sole shareholder.
Prepare the Required Documents
Two key documents you’ll need:
Memorandum of Association — a legal statement signed by all initial shareholders agreeing to form the company.
Articles of Association — rules about running the company agreed by the directors, shareholders, and company secretary (you can use standard ‘model articles’ or create your own).
Register with Companies House
You can register:
Online via the Companies House website
Or by post (Form IN01)
What you’ll need to provide:
Company name and address
Names and addresses of directors and shareholders
Share capital details
The Standard Industrial Classification (SIC) code to classify your business activity
Cost:
£12 for online registration (usually completed within 24 hours)
£40 by post (8-10 days)
Register for Corporation Tax
Once your company is registered, you’ll automatically get a Company Number and a Certificate of Incorporation. Within 3 months of starting to trade, you must register for Corporation Tax with HMRC.
You might also need to register for:
VAT (if turnover exceeds £90,000 per year, as of 2025)
PAYE if you’re hiring employees
Ongoing Responsibilities of a UK Ltd Company
After incorporation, your Ltd company has ongoing duties:
File annual accounts with Companies House
Submit a Confirmation Statement every year
Pay Corporation Tax on profits
Maintain accurate financial records
Notify Companies House of any changes (directors, shareholders, or company address)
Final Thoughts
Setting up a Ltd company in the UK is a relatively straightforward process, especially with online services and professional accountants available to help. It provides credibility, limited liability, and tax efficiency for many entrepreneurs.
Before registering, it’s wise to:
Decide if a Ltd company is the right business structure for your goals
Seek professional advice if unsure about tax implications or responsibilities
Once you’re set up, you’ll officially join the thousands of UK business owners creating opportunities in one of the world’s most supportive business environments.
