Guide to setting up a limited company

Companies House has published guidance entitled Set up a limited company: step by step. We have summarised the eight steps below.

1. Check if setting up a limited company is right for you. Consider whether a limited company suits your business. Many small businesses choose between setting up as a limited company or a sole trader. Seek advice if you’re unsure which structure fits your needs.

2. Choose your limited company type. You need to decide if your company will be limited by shares (common for profit-making businesses) or limited by guarantee (typically for non-profits).

3. Choose directors and a company secretary. Every company must appoint at least one director, who is legally responsible for running the business and ensuring compliance. You don’t need a company secretary, but one can help with administration.

4. Decide who the shareholders are. You need at least one shareholder (for companies limited by shares) or one guarantor (for companies limited by guarantee). These individuals can also be directors. You must also identify people with significant control over the company.

5. Choose a name. Pick a company name that follows legal rules, is not already in use and doesn’t conflict with existing trademarks.

6. Prepare documents agreeing how to run your company. You must prepare key legal documents, including a memorandum of association and articles of association, which set out how the company will operate. Depending on the company type, you may also need a statement of capital or statement of guarantee.

7. Check what records you'll need to keep. Companies are legally required to keep specific company and accounting records.

8. Register your company with Companies House. To register, you’ll need an official address and a SIC code that describes your business activity. Once your application is accepted, you will receive a certificate of incorporation. You will also need to register for tax and fulfil other post-registration obligations.

Our friendly Business and Tax Advisory experts are here to support you every step of the step of the way. Give them a call on 01380 723692 or email us here.