How to Set Up a Limited Company in the UK in 2026

When you set up a limited company in the UK, the business becomes a separate legal person that owns its contracts and owes its own debts, so your personal assets stay apart. One person can be the only director and the only shareholder, there is no minimum share capital, and profits up to £50,000 are taxed at 19%.

The paperwork around it has grown. Since 18 November 2025, every new director and every person with significant control must verify their identity before the company can be registered. The company also needs an appropriate UK registered office and a registered email, and its first deadlines start on the day it is formed.

This is where we come in. Binderr forms the company itself, so setting up a limited company in the UK runs through one team: the name check, identity verification, the articles, the Companies House filing and a bank-ready file. One starting price, no email chains, and a company ready to trade within a week.

Planning to offer shares to the public? That needs a PLC, so read how to set up a UK public limited company instead.

Why Set Up a Limited Company in the UK

A UK limited company is, in law, a private company limited by shares under the Companies Act 2006, and most founders choose it. Before looking at how to set up a limited company in the UK, these are the reasons to use one rather than trade in your own name.

Limited Liability for the Owners

The company is legally separate from its owners. If the business fails, a shareholder loses what they paid for their shares, plus anything still unpaid on them, and nothing more. The exceptions come from what a director signs and how a director acts, and we cover them below.

Fast Formation of a Limited Company Online

The formation of a limited company in the UK is fully digital. Companies House usually registers an online application within 24 hours, and a same-day service costs £156 through software. It recorded 192,287 new incorporations between April and June 2026, and the register held 5,516,377 companies at the end of June.

No Minimum Capital and No Secretary Needed

A private company has no minimum share capital, so many founders issue one share of £1. Under section 270 of the Companies Act 2006, it does not need a company secretary, and most small companies can skip the statutory audit.

Corporation Tax From 19%

Corporation Tax is 19% on profits up to £50,000 and 25% above £250,000, with marginal relief in between. Profit left in the company is taxed only at the company rate, and you decide when to take it out.

A Company Form Banks and Clients Know

Anyone can look up a UK limited company on the public register for free, and banks, payment providers and suppliers know how it works. That trust helps when you sell abroad. Read more: the benefits of setting up a company in the UK.

LTD vs Sole Trader vs LLP in the UK

The first decision in how to set up a limited company is the business type, and for most founders the answer is the private limited company. It is the only one of the three that gives a single owner limited liability and taxes kept profit at the company rate.

Read the liability and tax rows together. The price of the LTD's protection is a public record, with the accounts, officers and PSCs on it, and a set of yearly filings.

Private Company Limited by Shares (LTD)

Shareholders own it, directors run it, and it pays dividends from its profits. It fits a trading business, a start-up and most holding companies, and it is the default for private limited company formation in the UK. The public version, the PLC, needs £50,000 of share capital.

Company Limited by Guarantee

A guarantee company has no shares. Its members promise a fixed amount, often £1, if it cannot pay its debts, and that is their only liability. Charities and clubs use it, but it does not pay profits to its owners.

Limited Liability Partnership (LLP)

An LLP must have at least 2 designated members at all times. It pays no Corporation Tax itself: each member registers for Self Assessment and pays income tax on their share. It suits professional firms, not a single founder.

Sole Trader

A sole trader is not a company. You can start trading at once and must register for Self Assessment once you earn more than £1,000 in a tax year, but you are personally liable for every business debt. Setting up a limited company in the UK usually becomes the better choice once profit stays in the business. Read more: sole trader vs limited company in the UK.

Rules for Private Limited Company Formation in the UK

The Companies Act 2006 and the Economic Crime and Corporate Transparency Act 2023 set a short list of rules for private limited company formation in the UK. They come first in how to set up a limited company in the UK, and each one below follows the official guidance of the UK gov. Setting up a limited company without meeting one of them means a query or a rejected application.

One Director Aged 16 or Over

Section 155 of the Companies Act 2006 requires at least one director who is a real person, and section 157 sets the minimum age at 16. To set up a private limited company in the UK, that director does not have to live in the UK. The name, nationality and month and year of birth are public, but not the home address.

One Shareholder and Share Capital From £1

A company limited by shares needs at least one shareholder, who can also be the only director. A low share value, such as £1, limits what each shareholder can be asked to pay if the company is wound up. Anyone with more than 25% of the shares or votes is a person with significant control, or PSC. No company secretary is required.

An Appropriate Registered Office and a Registered Email

Since 4 March 2024, the registered office must be a physical address in the same part of the UK as the company, where post reaches someone acting for it and a sender can get proof of delivery. A PO box does not count. The company must also give Companies House an email address, which is not published. See our page on UK registered office address rules.

Identity Verification for Directors and PSCs

Since 18 November 2025, anyone who becomes a director or a PSC must verify their identity with Companies House and receive a personal code, free through GOV.UK One Login or through an authorised corporate service provider. On 16 September 2026, three directors were convicted and fined in the first Insolvency Service prosecutions for acting without verifying. Our ultimate beneficial owner guide shows how control is traced through layers of companies.

A Name Ending in Limited or Ltd

The name must usually end in Limited or Ltd, or Cyfyngedig or Cyf for a company registered in Wales. It cannot be the same as a name on the register, and sensitive words need permission first. Anyone setting up a private limited company in the UK should clear the name before paying for a logo or a domain.

Limited Liability and Where It Stops

Anyone setting up a limited company in the UK should know where the protection ends. Limited liability protects the shareholders, but it weakens when a director signs a personal guarantee, breaks the general duties or keeps trading when the company cannot pay its debts.

Personal Guarantees

Banks, landlords and leasing firms often ask the director of a new company to guarantee its debts personally. A guarantee sits outside limited liability, so read it before you sign, cap it in amount and time where you can, and keep a list of what you have signed.

The Seven Director Duties

The Companies Act 2006 sets 7 general duties, including promoting the success of the company, using reasonable care, skill and diligence, avoiding conflicts of interest and declaring any interest in a transaction. They apply in a one-person company too.

Wrongful Trading and Disqualification

Under section 214 of the Insolvency Act 1986, a court can order a director to contribute to the assets of a company in insolvent liquidation, where the director should have seen that insolvency could not be avoided and did not take every step to reduce the loss to creditors. Unfit conduct can also lead to disqualification for up to 15 years, and breaking a disqualification can mean up to 2 years in prison.

How to Set Up a Limited Company in the UK

Here is how to set up a limited company in the UK in five stages, in the order that avoids delays and in line with the guidance of the UK gov. Setting up a limited company with us follows the same order, and we do the work. It answers the question most founders start with, how do I set up a limited company in the UK. For registration in general, see our UK company registration guide.

Choose the Name and Check the Register

We check the name against the register, the 'same as' rules and the sensitive words first. A name that differs from an existing one only by punctuation or a common word counts as the same and is refused. Our guide to checking a UK company name explains the rules.

Verify Every Director and PSC

Each director and PSC verifies once and receives a personal code that works for every UK company they are involved in. With a biometric passport, GOV.UK One Login is often done in one sitting from any country. No LTD company registration in the UK can be filed without every code.

Settle the Address, the Shares and the SIC Code

Next come the registered office, the registered email, the statement of capital and the articles. The statement of capital lists each shareholder, their shares and the rights attached. Most small companies adopt the model articles, and every company picks at least one SIC code, a five-digit code for what it does.

Private Limited Company Registration in the UK

The application is one online form to Companies House, with a statement that the company is formed for a lawful purpose. The digital fee is £100, and a clean application is usually registered within 24 hours. The registration of a limited company in the UK can also be done on paper, on form IN01, for £124, but that takes 8 to 10 days.

After Limited Company Incorporation in the UK

You then receive the certificate of incorporation, showing the company number and the date of formation. HMRC posts the 10-digit Unique Taxpayer Reference to the registered office, and you can request it online if it has not arrived within 15 working days. You must tell HMRC within 3 months of the company becoming active. See how to find a UK company registration number.

Documents Needed for UK LTD Company Registration

Most questions about how to set up a limited company in the UK come down to paperwork. Companies House asks for details, not certified copies, for private limited company registration in the UK, because identity is checked through verification. The list below is what we collect when setting up an LTD company, and the bank asks for most of it later.

For Each Director, Shareholder and PSC

• Full legal name and date of birth: As shown on the passport used for verification.
• Nationality and country of residence: Shown on the public register for directors.
• Service address: Any address in the world, and it is public.
• Home address: Held by Companies House and kept off the public record.
• Personal code: From GOV.UK One Login or an authorised agent.
• Passport and proof of address: For our checks and the bank, the address dated within 3 months.

For the Company and the Bank

For UK limited company registration, we need the proposed name, the registered office, the registered email, the SIC code, the share structure and a short description of the business. A corporate shareholder adds its registry extract, its constitution and an ownership chart up to the individuals. For the bank, add expected monthly volumes, the countries you trade with and where the starting money comes from.

UK Limited Company Formation Cost in 2026

Our price for UK limited company formation starts from €350, paid once, for a standard private company limited by shares, holding and trading companies included. It covers the structure advice, the name check, identity verification guidance, the model articles, the statement of capital, the PSC details, the filing and a bank-ready file, confirmed in writing before you pay. The LTD company UK registration fee of £100 goes to Companies House and is shown separately on your quote. Layered groups, regulated firms and high-risk activities are quoted separately and can cost more.

The cost of setting up a limited company in the UK does not stop at formation. The table adds the running costs of the first 12 months.

Registering for Corporation Tax, VAT and PAYE with HMRC costs nothing.

LTD Company Formation Costs by Profile

What the company does and where its owners live move the total most.

LTD company formation in the UK is cheap to start, and the total moves with VAT, payroll and the account plan. These are planning ranges, with sterling converted at recent rates, and your written quote is what counts. Read more: the cost of setting up a UK company.

How Long UK LTD Registration Takes

UK LTD registration itself is quick: an LTD company UK registration filed online is usually approved within 24 hours. With us, setting up a limited company in the UK, from the first call to the certificate, fits in about a week, and most of that week goes on identity checks and documents.

The registry is rarely the slow part of UK limited company registration. Delays come before the filing or after it, at the bank.

What Adds Days

A failed online identity check, a name that clashes with one on the register, an address that is not appropriate and a corporate shareholder whose owners are not yet identified all add time. A paper application for private limited company registration in the UK adds 8 to 10 days on its own.

Keeping It to About a Week

If you want to know how to set up an LTD company in the UK in about a week, start the personal codes on day one and prepare the bank file with the company file. Our guide on how long it takes to register a UK company covers each stage.

Running a UK LTD Each Year

From the day of registration, LTD company UK deadlines start to run, so setting up a limited company in the UK also means setting up a calendar. The confirmation statement and the accounts go to Companies House, the tax return goes to HMRC, and each has its own penalty.

The accounts and the tax return cover the same year, but they have different deadlines and separate penalties. This calendar is the part founders forget most when they plan how to set up a limited company.

The Confirmation Statement

At least once every 12 months, the company confirms its registered office, officers, shares, SIC code and PSC details, and that its future activities will be lawful. The fee is £50 online, or £110 on paper.

Accounts and the Company Tax Return

Every company prepares statutory accounts, even with no income. A micro-entity meets two of three tests: turnover of £1 million or less, £500,000 or less on the balance sheet and 10 employees or fewer, and it files a simpler balance sheet. From 1 April 2028, accounts must be filed through software. HMRC needs a Company Tax Return every year, even after a loss.

Changes and Records

After LTD company registration in the UK, changes to directors or PSCs go to Companies House within 14 days, and new shares within a month. Since 18 November 2025, companies no longer keep their own registers of directors or PSCs, but they must keep a register of members. Records are kept for 6 years, and HMRC can fine a company £3,000 for not keeping them.

Not filing accounts or the confirmation statement can get the company struck off. Companies House recorded 67,815 compulsory dissolutions between April and June 2026, so the calendar matters from the day after limited company incorporation in the UK.

Tax for a UK Limited Company

A UK limited company pays Corporation Tax on its profits, charges VAT above the threshold and runs payroll if it pays a salary. For anyone setting up a limited company in the UK, the bigger question is how profit reaches you.

Corporation Tax From 19% to 25%

Profits up to £50,000 are taxed at 19% and profits above £250,000 at 25%. Between the two, marginal relief applies, and each extra pound in that band is taxed at an effective 26.5%. Both limits are shared between associated companies.

VAT at 20%

The standard VAT rate is 20%. A company must register once taxable turnover passes £90,000 in any 12 months, or when it expects to pass it in the next 30 days. Registering earlier by choice lets it reclaim VAT on its costs.

Salary or Dividends

A salary runs through PAYE and reduces taxable profit. In 2026/27, employee National Insurance starts at £12,570 a year at 8%, and employer National Insurance is 15% above £5,000. A salary at or above £6,708 a year keeps your State Pension record building. The £10,500 Employment Allowance cannot be claimed where the only director is the only employee liable for employer National Insurance.

A dividend is paid from profit after Corporation Tax, needs a board decision with minutes and a dividend voucher, and cannot exceed the available profits. From 6 April 2026, each shareholder has a £500 allowance, then pays 10.75%, 35.75% or 39.35% by tax band. A director on a £12,570 salary who takes £10,000 of dividends pays 10.75% on £9,500, which is £1,021.25.

Taking a Loan From Your Own Company

Money taken out that is not a salary, a dividend or a repaid expense is a director's loan. If it is still unpaid 9 months after the year end, the company pays tax on it under section 455, at 35.75% for loans made from 6 April 2026, and gets it back only after repayment.

Moving From Sole Trader to a Limited Company

Many people who ask how to set up a limited company already trade as a sole trader. When you set up an LTD in the UK to take over that business, profit moves into the company tax bands and your personal assets sit behind limited liability, but the filings grow.

When the Switch Makes Sense

A sole trader pays income tax at 20%, 40% or 45% on all profit, plus Class 4 National Insurance at 6% between £12,570 and £50,270 and 2% above. Since 6 April 2026, sole traders with qualifying income over £50,000 must also use Making Tax Digital for Income Tax, falling to £30,000 in April 2027 and £20,000 in April 2028. Profit you do not need to spend and contracts with real liability are the usual triggers for a company.

What Changes on Day One

The company is a new legal person with its own bank account, invoices and tax registrations. Contracts should move across, because a contract you signed as a sole trader stays yours, and you tell HMRC you have stopped trading as a sole trader.

Incorporation Relief

Moving goodwill and other assets into the company can create a capital gain. Incorporation relief under section 162 of the Taxation of Chargeable Gains Act 1992 defers it when the whole business moves as a going concern in exchange for shares. For transfers from 6 April 2026, the relief must be claimed in your Self Assessment return.

Setting Up a Private Limited Company in the UK as a Non-Resident

For a founder abroad asking how do I set up a limited company in the UK, the answer is the same as for a resident: the same rules, the same fee and the same application. Nobody has to live in the UK or travel. Our guide to UK company formation for non-residents covers it in full.

What You Need From Abroad

For private limited company formation in the UK from abroad, you need a UK registered office, which most founders get through a registered office service, and a personal code for each director and PSC, which GOV.UK One Login issues from any country. HMRC posts the Corporation Tax activation code to the registered office within 10 days, or 21 days if you live abroad. An existing foreign company can form a UK subsidiary instead, or register a UK branch.

Tax Residence and VAT

Knowing how to set up an LTD company in the UK from abroad also means planning tax. A UK-incorporated company is UK tax resident, but if the directors run it from another country, that country may claim it too, so check whether a UK company is tax resident. HMRC also says incorporation alone does not create a UK establishment for VAT, so a company run from abroad can have to register from its first UK sale.

Business Banking for a New UK LTD

The account is the last step in setting up a limited company in the UK, because a new LTD cannot apply until the certificate exists. UK banks can be cheap for a UK-resident founder, but they want a UK-resident applicant and take time with a new company. Our partners open accounts in days.

To be fair to the banks, a UK bank is often cheaper on the monthly fee, and a start-up offer can make it free for a year or two. Our partners win on speed, on owners abroad and on every payment that crosses a border. Read more: how to open a UK business bank account.

Why UK Banks Are Slow With a New LTD

A new company has no trading record, so a high street bank leans on the directors' own UK credit footprint, and some cannot take a company whose director or PSC lives abroad. If that is you, see UK business bank accounts for non-residents.

The Faster Route Through Our Banking Partners

We work with regulated payment partners that open multi-currency accounts for new UK LTDs in days, online and with no minimum balance, using the same KYC pack as the company file. Read what an EMI account is if these accounts are new to you, and see how to set up a UK company with a bank account in one process.

Read more: our UK business bank account guide and the best business bank accounts in the UK.

UK Limited Company vs Ireland, Cyprus and Malta

Founders setting up a limited company in the UK often weigh it against an EU company: Ireland for trading, and Cyprus or Malta for holding structures. We form all four, so the choice turns on tax, EU access and price.

UK limited company formation is the cheapest of the four and the only one outside the EU single market. The EU options cost more to form and run, and make sense when customers, contracts or a licence need an EU company.

UK LTD vs an Irish LTD

An Irish LTD pays 12.5% on trading profit, but it must have a company secretary, and if no director lives in the European Economic Area it needs a €25,000 Section 137 bond. LTD company formation in the UK needs neither. Choose Ireland when your customers must contract with an EU company. See our Ireland company formation guide and how to set up a limited company in Ireland.

UK LTD vs a Cyprus Company

Cyprus charges a flat 15% on company profit from 2026. That is below the UK's 25% main rate but above the 19% small profits rate. It suits a holding company that receives dividends from several countries. Read about holding company formation in Cyprus.

UK LTD vs a Malta Company

Malta taxes company profit at 35%, then refunds six sevenths of that tax to shareholders after a dividend, which brings the effective rate to about 5%. That is lower than the UK rate, but it only arrives once profit is paid out. Read how to set up a Malta holding company.

Who Should Not Set Up an LTD in the UK

Before you set up an LTD in the UK, check that you need one. It is the wrong tool for a small side business that spends all its profit, because the yearly filings can cost more than the tax they save. It also puts your name, month and year of birth and the company's accounts on a public register, so it does not suit anyone whose main goal is privacy.

Setting up a limited company in the UK is also wrong for a business that needs an EU company for its customers or licences. For payments, crypto or investment firms, FCA permission comes first, and the licence decides the timeline.

Common Mistakes When Setting Up a Limited Company in the UK

Many founders who read about how to set up a limited company focus on the filing and miss what comes around it. These mistakes cost the most when setting up an LTD company, and our checks catch them before anything is filed.

Using an Address That Is Not Appropriate

A friend's flat, an old office or a PO box will not work if post stops reaching you. HMRC sends the tax reference there, and Companies House sends penalty notices. A company without an appropriate address can be struck off.

Mixing Company Money With Your Own

The company's money is not yours until it is paid as a salary or a dividend. Paying personal bills from the company account creates a director's loan, and an unpaid loan can cost the company 35.75% under section 455.

Treating the Filing Fee as the Whole Cost

For UK private limited company registration, DIY vs provider is rarely decided by the £100 fee. The real cost sits in the address, the accounts, the bank and the first deadlines.

Bottom Line

UK limited company formation gives a business limited liability, a 19% rate on the first £50,000 of profit and a company form that banks and clients trust. It needs one director aged 16 or over, one shareholder, an appropriate UK registered office and verified identities for the people in control.

Knowing how to set up a limited company is mostly about what surrounds the filing: the personal codes, the first deadlines, and how you take money out at the 2026/27 rates. For anyone still asking how do I set up a limited company in the UK, the answer with us is one team and one quote: UK LTD company formation starts from €350, with every director guided through verification and the first-year budget shown before you pay.