Starting a business in the UK is exciting, but getting the company formally set up can feel more complicated than it should.
A lot of people get stuck on the same things: “Do I really need a limited company?”, “What’s Companies House actually asking me for?”, and “How do I avoid making a mistake that delays everything?”
Doing everything right from the start is critical. Even something as simple as a wrong address or missing shareholder info can hold you up or, worse, leave you with fines later.
And the truth is, company formation isn’t just a tick-box exercise. The decisions you make like the structure you pick, affect tax obligations, liability, and ability to attract potential investors or lenders. Rushing through this stage could mean paying more in taxes or hardships raising funds down the line.
The good news? Setting up a UK company is actually pretty straightforward once you know the steps. Here’s a simple breakdown of what you need to do.
1. Decide if limited company is right for you
There are many steps to set up a company in the UK, but it all starts with deciding the type of company you want to own. In the UK, many small businesses start as sole traders because it’s cheap and simple. But a limited company has real advantages if you want liability protection, credibility, or long-term growth.
One of the most common structures you can opt for is a company limited by shares. It basically means ownership of the company is based on shares. Alternatively, you can register a company limited by guarantee. This is ideal for non-profits or charities where proceeds are reinvested in the business.
The main thing is that once you’re a limited company, the business becomes its own legal “person.” That means it can own property, sign contracts, and take on debt—separate from you personally. That protection is why most growing businesses end up choosing this route.
2. Choose a company name and registered address
This bit is more important than it looks. Your company name is your identity, but Companies House has rules. The name can’t be the same as, or too similar to, an existing company. Certain words (“British,” “bank,” “association”) need special approval. And anything misleading or offensive will be rejected outright. It only takes a few seconds to run your idea through a name checker to see if it’s available.
Next, you’ll need a registered office address. It acts as the official address where all important mail like legal notices and packages are sent. Companies House requires an address where they can send notices like filing reminders and HMRC tax letters.
3. Appoint directors (and maybe a secretary)
Every limited company needs at least one director—the person legally responsible for keeping things in order. Directors must be 16 or older and not banned from running companies. If you’re setting up on your own, you’ll probably be both the director and the shareholder.
A secretary isn’t required anymore, but bigger businesses sometimes appoint one to handle admin. For most small companies, it’s not worth the extra step.
4. Appoint shareholders and declare PSCs
If your company is limited by shares, you’ll need at least one shareholder. This is where ownership gets decided. If you’re on your own, you can just issue one share to yourself and own 100% of the company. If you’re starting with a partner, you could each take one share for a 50/50 split.
Shares usually have a nominal value of £1, and that’s the limit of your liability. So if you hold one £1 share, your risk is capped at £1 if the company fails.
At this stage, you’ll also need to think about People with Significant Control (PSCs)—basically, anyone who owns or controls more than 25% of the company. Even if that’s just you, it still needs recording. By law, you need to keep a register of PSCs and update it every year in your Confirmation Statement.
5. Prepare your documents
Every company is built on two documents:
- Memorandum of Association – a short statement signed by the first shareholders confirming they agree to form the company.
- Articles of Association – the “rulebook” for how the company runs, covering things like director powers, share issues, and meetings.
Most people just adopt the standard “model articles” from Companies House, but if you want something more tailored (say, rules about how profits are split), you can create your own. If you use a formation agent, these documents are usually prepared and sent to you automatically.
6. Get your record-keeping in order
This is something that most new company owners often underestimate. Once your company exists, you’re legally responsible for keeping proper company and accounting records.
Even if your company isn’t trading much, the records still need to be kept.
HMRC and Companies House can fine you if things are missing. The smart way is to set up a simple system from the start—whether that’s software, a spreadsheet, or an accountant. If you’ve got very few transactions, some accountants will handle everything for as little as £500 a year.
7. Complete the application and register your company
Now it’s time to make everything official. When you’re ready to register with Companies House, you’ll need a handful of details: your company name, an official address, who’s running the show (directors and shareholders), who has real influence (your PSCs), and one of those SIC codes that explains what your business actually does.
You can go straight to the Companies House website and do it yourself. But plenty of people use a company formation agent to avoid the struggle. The paperwork is clearer, they double-check things for you, and in many cases, your company is up and running quickly.
If everything checks, you’ll get a Certificate of Incorporation. That’s the moment your company officially comes to life and is ready to operate legally.
Conclusion
At first glance, forming a company in the UK feels like climbing a mountain. In reality, it’s just a series of decisions—picking your structure, choosing a name, working out who’s involved, then filing the right forms. It’s admin, not alchemy.
The real trick is in the prep. So, get your details correct from the start to avoid the headaches later. Missing even something small when filling out the forms could take some time to fix once the application is submitted. A smart approach is to work with a company formation agency to smoothen things, and make the process quicker.
DISCLAIMER – “Views Expressed Disclaimer – The information provided in this content is intended for general informational purposes only and should not be considered financial, investment, legal, tax, or health advice, nor relied upon as a substitute for professional guidance tailored to your personal circumstances. The opinions expressed are solely those of the author and do not necessarily represent the views of any other individual, organization, agency, employer, or company, including NEO CYMED PUBLISHING LIMITED (operating under the name Cyprus-Mail).
Click here to change your cookie preferences