To form a UK private limited company you submit Form IN01 online to Companies House, with a fee of £50 for standard processing or £78 for same-day. Most companies are incorporated within 24 hours. After incorporation you must register for Corporation Tax with HMRC within three months of starting to trade, open a business bank account, and complete identity verification under the Economic Crime and Corporate Transparency Act 2023.

This guide walks through what to decide before you start, the seven-step formation process, what happens in the first 30 days after incorporation, the all-in 2026 cost, and the most common formation mistakes.

Before you start

Three checks before formation:

Eligibility

Anyone aged 16 or over, not currently disqualified as a director, and not an undischarged bankrupt can form a UK limited company. There are no nationality or residence requirements for UK incorporation, although banks and ID-verification services may require additional documentation for non-UK residents.

Name check

Search the Companies House register at find-and-update.company-information.service.gov.uk to confirm the name is available. The same-as rule disregards minor punctuation and suffix differences. Sensitive words (Royal, Bank, Charity, Council, etc.) need supporting consent.

ID verification under ECCT 2023

The Economic Crime and Corporate Transparency Act 2023 introduced compulsory identity verification for directors and PSCs. You must verify your identity either direct with Companies House (via the GOV.UK ID Check service) or through an Authorised Corporate Service Provider (an accountant, formation agent, or law firm registered as an ACSP). Verification is once per individual.

Step-by-step formation

The seven-step process for incorporating a UK private limited company:

1. Choose a name

Run the availability search and sensitive-words check. Add “Limited” or “Ltd” as the suffix (or “Cyfyngedig”/“Cyf” in Wales). Confirm domain availability if you plan to use the name as a brand.

2. Choose director(s) and shareholder(s)

Decide who will be the initial director(s) and shareholder(s). Often the same people. A UK company needs at least one human director (corporate-only directorships are restricted under post-2017 rules, with full implementation continuing through ECCT 2023).

3. Decide the share structure

For a one-person company, 1 ordinary share of £1 nominal is the standard starting point. For multi-founder companies, decide how shares split, whether to use single or multiple classes, and whether to add an EMI option pool now or later.

4. Confirm the registered office

Every company needs a UK registered office address (separate by jurisdiction in Northern Ireland or Scotland if relevant). The registered office is on the public register. Many founders use a formation agent’s service address rather than putting their home on the register.

5. Choose SIC code(s)

Pick up to four Standard Industrial Classification codes from the Companies House condensed list. Choose the most accurate match for your main activity. SIC codes are used for statistical reporting and increasingly by banks and lenders for due-diligence checks.

6. Submit Form IN01 online

File via Companies House WebFiling or through a formation agent. The 2026 fees:

  • Standard online: £50
  • Same-day online: £78
  • Paper (recommended only if online unavailable): £71

The form gathers everything from steps 1 to 5, plus the memorandum and articles of association (model articles are the default; bespoke articles need to be submitted at incorporation).

7. Receive the certificate of incorporation

Standard processing typically takes a few working hours up to 24 hours. The Certificate of Incorporation confirms your company name, number, registered office, date of incorporation, and limited-company status. From that point your company legally exists.

To compare incorporation against alternatives (sole trader, partnership), see limited company vs sole trader 2026.

Memorandum and articles of association

Two foundational documents:

Memorandum of association

A short statement that the subscribers wish to form a company under Companies Act 2006 and become members. Standard form, signed by the initial subscribers. No bespoke content for most companies.

Articles of association

The internal rule book. Most companies adopt the model articles for private companies limited by shares (set out in the Companies (Model Articles) Regulations 2008). Model articles are well-drafted and adequate for most one-person and small multi-founder companies.

Bespoke articles are needed where you want to:

  • Use multiple share classes with different rights
  • Modify pre-emption rights or include drag-along/tag-along provisions
  • Restrict transfer of shares
  • Adjust quorum or voting rules
  • Include investor-protection or founder-vesting clauses

Most rounds of external investment require bespoke articles. For early-stage companies, model articles are usually fine and can be replaced later.

After incorporation: first 30 days

Five essential first-month tasks:

Open a business bank account

Apply with Starling, Mettle, Tide, or a high-street bank. Digital banks typically open accounts within 24–72 hours; high-street banks can take longer. Keep business and personal banking strictly separate.

Register for Corporation Tax with HMRC

Within three months of starting to trade, register the company for Corporation Tax. HMRC issues a 10-digit Unique Taxpayer Reference. Registration is online via the company’s own Government Gateway account.

Register for VAT if expected

If you expect to exceed the £90,000 VAT registration threshold within the next 12 months, register voluntarily early. Voluntary registration can also be advantageous for B2B businesses recovering input VAT.

Register for PAYE if employing

If you will employ anyone (including paying yourself a director salary), register for PAYE up to four weeks before the first payday.

Set up bookkeeping software and statutory registers

Choose accounting software (Xero, QuickBooks, FreeAgent, Sage). Set up your statutory registers — directors, members, PSCs, allotments, charges. Most cloud platforms maintain these for you in addition to bookkeeping.

Cost summary 2026

Total all-in cost to form and operate a basic UK Ltd in year one:

ItemCost
Incorporation (online standard)£50
Confirmation statement (annual, from Feb 2026)£50
Bookkeeping software (annual)£150–£600
Accountant fees (annual, typical small Ltd)£600–£1,500
Business bank account (digital, free)£0
Year-one total£850–£2,200

Same-day incorporation, formation-agent extras (registered office, mail forwarding), and additional services push the cost up. Sole-trader registration is free and has no annual filing equivalent — the cost gap is real.

Common formation mistakes

Five frequent issues:

  • Wrong SIC code. Picking a generic catch-all code (74990 “Non-trading company”) instead of the activity-specific code. Banks and lenders sometimes refuse accounts to companies with vague SIC.
  • No PSC declared. Persons of Significant Control must be identified and recorded at incorporation. Missing PSC information delays processing.
  • Residential address as registered office. Putting your home address on the public register. Use a formation agent’s service address or another business location.
  • Wrong share structure. Single £1 share when you need flexibility for future investors or partners. Easier to set up a flexible structure now than restructure later.
  • Mixing personal and business finances. Operating without separate business banking. Causes accounting confusion and can pierce the corporate veil in extreme cases.

Key takeaways

  • Online incorporation costs £50 standard / £78 same-day from 1 May 2024
  • Most companies are incorporated within 24 hours
  • ID verification under ECCT 2023 is compulsory for directors and PSCs
  • Register for Corporation Tax within three months of starting to trade
  • Year-one all-in cost typically £850–£2,200 for a basic Ltd
  • Use model articles unless you need bespoke share classes or investor terms

Frequently asked questions

How much does it cost to form a limited company? £50 for standard online incorporation, £78 for same-day, and £71 for paper, from 1 May 2024 and continuing through 2026. Formation-agent service fees on top vary widely.

How long does it take to form a UK limited company? Standard online processing typically takes a few working hours, up to 24 hours. Same-day processing is available at a premium fee.

Do I need an accountant to form a company? No. Most one-person companies are formed direct on Companies House WebFiling or through a low-cost formation agent. An accountant becomes useful for ongoing compliance, payroll, and tax filing.

Can I be the sole director and sole shareholder? Yes. A UK private limited company needs only one director (a human aged 16+) and one shareholder. The same person can be both.

When do I need to register for VAT? When VAT-able turnover exceeds the registration threshold (£90,000 — verify the current figure). You can register voluntarily below the threshold, which may be beneficial for B2B businesses.

(Companies House fees changed on 1 February 2026 — verify current confirmation statement and other ongoing fees before quoting.)

Useful resources

Companies House — Set up a limited company https://www.gov.uk/limited-company-formation

Companies House — WebFiling https://ewf.companieshouse.gov.uk/

GOV.UK — Register for Corporation Tax https://www.gov.uk/register-for-corporation-tax