Thinking about starting a limited company? Good call — it’s a great way to separate your personal and business finances, look more professional, and potentially save on tax. But where do you begin? Here’s a straightforward guide to walk you through the essentials.

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1. Pick a Company Name

First up, you’ll need a name for your business. It has to be unique and not already taken — you can check this easily using the Companies House name checker. Remember, your name must end with “Limited” or “Ltd” unless you’re setting up a community interest company.

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2. Choose Your Directors (and Secretary, If You Want One)

Every limited company needs at least one director — that might be you. You’re responsible for making sure the company meets its legal obligations. You don’t have to appoint a company secretary, but you can if you want someone to help manage the admin.

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3. Decide on Shareholders and Shares

A limited company is owned by its shareholders. You can be the only one, or you can bring others on board. You’ll need to decide how many shares the company has and how they’re split between shareholders. This affects how profits are shared.

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4. Prepare Your Company Documents

There are two key documents you’ll need:

• Memorandum of Association – a simple statement confirming the original shareholders agree to form the company.
• Articles of Association – this outlines the rules for running your company, agreed by everyone involved.

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5. Register with Companies House

Once you’ve got your details sorted, you can register your company with Companies House. This can be done online or by post. You’ll need to provide:

• Your company name and address
• Names and details of directors and shareholders
• The share structure

There’s a small fee to register, and once approved, you’ll get a company number and certificate of incorporation.

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6. Open a Business Bank Account

To keep things tidy, it’s best to open a separate bank account for your company. You’ll usually need your company registration number and ID for all directors to set one up.

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7. Tell HMRC About Your New Company

Within three months of starting to trade (that is, when you begin doing business), you need to register for Corporation Tax. HMRC will send you a Unique Taxpayer Reference (UTR), which you’ll use when filing tax returns.

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8. Keep Good Records

Running a company means keeping proper records of:

• Company info (like directors, shareholders, addresses)
• All income, expenses, and bank transactions
• Details of assets and debts

These records are essential for filing your accounts and tax returns.

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9. Consider VAT Registration

If your company turns over more than £90,000 in a 12-month period, you must register for VAT. But even if you earn less, registering voluntarily could be helpful, especially if you work with other VAT-registered businesses.

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10. Stay on Top of Your Responsibilities

Once your company is up and running, you’ll need to:

• File your annual accounts and confirmation statement
• Pay Corporation Tax on time
• Update Companies House if your company details change
• Keep accurate records year-round

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Final Thoughts

Setting up a limited company might feel overwhelming at first, but take it step by step and you’ll be up and running in no time. If you’re not sure about anything, speaking to an accountant or company formation agent can help you avoid mistakes and get started the right way.