How to form a UK limited company in 2026: the complete step-by-step guide

Over 900,000 new companies were registered at Companies House in 2024. That is roughly one every 35 seconds — a pace that has held steady through rate hikes, recessions, and political reshuffles. The UK remains one of the fastest and cheapest places on Earth to start a legally recognised business. But speed creates its own trap: founders rush through the process, pick defaults they do not understand, and spend six months unpicking decisions that were locked in on day one.

This guide covers how to form a UK limited company properly — the decisions you make before you file, the filing itself, and the identity verification obligations that changed everything in late 2025 under the Economic Crime and Corporate Transparency Act (ECCTA). If you follow this from top to bottom, you will incorporate with a structure that works for your first year, not just your first afternoon.

What is a UK limited company — and why choose one?

A private company limited by shares (the standard "Ltd") is a separate legal entity from its owners. It can own property, enter contracts, sue and be sued in its own name. If the company fails, the shareholders' personal liability is limited to the value of their unpaid shares — in most cases, a nominal £1. That wall between personal and business assets is the entire point.

Compared to operating as a sole trader:

• Limited liability protects personal assets from business debts (subject to lawful conduct — directors can still be held liable for wrongful or fraudulent trading under ss. 213–214 Insolvency Act 1986).
• Corporation Tax at 19–25% on profits, with flexibility to extract income as dividends (taxed at lower rates than employment income).
• Professional credibility — clients, investors, and suppliers expect a registered entity with a Companies House record.
• Equity — you can issue shares to co-founders, investors, and employees, which you simply cannot do as a sole trader.

The trade-off is compliance: annual accounts, a confirmation statement every 12 months, statutory registers, and public disclosure of directors and shareholders. This guide helps you set up those obligations correctly from the start.

Before you file: seven decisions to make first

The Companies House incorporation form takes minutes to complete. The thinking that should precede it takes longer. Get these seven decisions right and the rest is administrative.

1. Choose your company name

Your proposed name must be unique on the Companies House register and must not be misleading or offensive. The rules are stricter than most founders expect:

• The name must end with "Limited" or "Ltd" (or the Welsh equivalents "Cyfyngedig" / "Cyf").
• It cannot be "the same as" an existing registered name. "Same as" is tested after stripping punctuation and common suffixes — so "ABC Solutions Ltd" and "A.B.C. Solutions Limited" would clash.
• Certain words require prior approval from the Secretary of State: "Royal", "Bank", "Insurance", "Council", "Authority", "British", "National", "Trust", and many others listed in the Company and Business Names (Sensitive Words and Expressions) Regulations 2014.
• You cannot use a name that would constitute a criminal offence or is offensive.
• A name that suggests a connection with government or a local authority requires explicit approval.

Use the Companies House name availability checker before filing. If your preferred name is taken, consider variations — but remember that trading names (the name you use day-to-day) can differ from your registered name. Many founders register a straightforward legal entity ("Smith Ventures Ltd") and trade under a brand name, disclosing the registered name on invoices and business letters as required by the Companies Act 2006. If you need to change it later, read our guide to changing your company name.

2. Decide on your registered office address

Every UK limited company must have a registered office address in England and Wales, Scotland, or Northern Ireland (matching the jurisdiction you incorporate in). This is where Companies House sends official correspondence — and it appears on the public register, permanently.

Many founders use their home address at incorporation because it feels convenient. The problem: historical filings remain visible even after you change the address, meaning your home address stays on the public record indefinitely. Our article on home address risks covers this in detail.

A registered office service gives you a professional business address from day one, keeps your home off the public register, and forwards any Companies House or HMRC post directly to you. If you want a prestigious London presence, a London service address adds credibility without the rent.

3. Appoint your directors

You need at least one director who is a natural person (an individual, not a company). There is no maximum. The director is responsible for running the company, filing on time, and complying with the seven general duties codified in ss. 171–177 Companies Act 2006: act within powers, promote the success of the company, exercise independent judgement, exercise reasonable care and skill, avoid conflicts of interest, not accept benefits from third parties, and declare any interest in proposed transactions.

Key eligibility rules for directors:

• Must be at least 16 years old (s. 157 CA 2006).
• No UK residency requirement. Nationality is irrelevant — directors can live anywhere in the world.
• Must not be disqualified under the Company Directors Disqualification Act 1986.
• Must not be an undischarged bankrupt (unless with leave of the court).

Since 18 November 2025, every director must complete identity verification before or at the point of incorporation. This is covered in detail below.

4. Identify your shareholders and share capital

Shareholders are the owners of the company. At incorporation, you must have at least one subscriber share — one person or entity subscribing for at least one share. The most common setup for a single-founder company is 1 ordinary share at £1. For two co-founders splitting equally, it is 100 ordinary shares at £1 each, split 50/50.

Decisions to make:

• Number of shares — 100 or 1,000 gives you room to divide ownership without fractions.
• Nominal value — £1 is standard. The nominal value is the minimum the shareholder has paid (or promised) for the share. It does not reflect market value.
• Share class — "Ordinary" shares carry equal rights to dividends, votes, and capital on winding up. If you need different rights for investors (preference shares) or employees (growth shares), you will need bespoke Articles.

You can issue more shares later, but getting the initial structure right avoids costly amendments when an investor or co-founder arrives. For more detail, see our guide to issuing shares.

5. Confirm your PSC (Person with Significant Control)

Every company must identify its People with Significant Control and include them in the incorporation filing. A person is a PSC if they hold more than 25% of shares or voting rights, can appoint or remove a majority of directors, or otherwise exercise significant influence or control over the company.

For most new companies, the PSC is the founder (or co-founders). Since ECCTA came into force, PSCs must also complete identity verification — the same process directors go through. This is a one-off per person; once verified, they do not need to re-verify for subsequent appointments or PSC notifications.

6. Pick your SIC codes

SIC (Standard Industrial Classification) codes describe what your company does. You must select at least one — up to four — at incorporation. These appear on the public register and on your confirmation statement. Choose codes that accurately reflect your planned activities; you can update them later on your annual confirmation statement.

Our SIC codes guide walks through how to find the right codes for your business.

7. Choose your Articles of Association

The Articles of Association are your company's constitutional document — they govern how the company is run, how decisions are made, and the rights attached to shares. You have two options:

• Model Articles — the default set prescribed by the Companies (Model Articles) Regulations 2008. Free, well-understood, and sufficient for most single-founder or simple co-founder setups.
• Bespoke Articles — tailored to your specific needs. Common when you have multiple share classes, investor rights, drag-along/tag-along provisions, or complex decision-making structures. Usually drafted by a solicitor.

If you adopt Model Articles at incorporation, you can amend them later by special resolution (75% of shareholders). Many founders start with Model Articles and move to bespoke Articles when they raise investment.

The formation process: step by step

With your seven decisions made, the actual filing is the straightforward part. Here is the process from start to certificate.

Step 1: Complete identity verification

Since 18 November 2025, identity verification is mandatory for all directors and PSCs. This must be completed before the incorporation application is submitted. There are two lawful routes:

1. GOV.UK One Login — free, direct, done online. You will need a valid UK passport or driving licence and a smartphone for the face-matching step. Processing is typically immediate.
2. Authorised Corporate Service Provider (ACSP) — a registered agent (like Filing HQ) verifies your identity on your behalf. Essential if you do not have a UK photo ID, are overseas, or prefer a guided experience.

Identity verification is a one-off per person. Once you have verified, you do not need to do it again for future directorships or PSC appointments at other companies.

Step 2: Prepare your incorporation documents

The filing requires:

• Memorandum of Association — a short document confirming the subscribers (initial shareholders) wish to form the company and agree to take at least one share each. On the digital filing, this is generated automatically.
• Articles of Association — either the Model Articles or your bespoke version.
• Form IN01 (Application to register a company) — captures the company name, registered office, directors, secretary (if appointed), shareholders, share capital, SIC codes, and PSC details.
• Statement of compliance — confirming the requirements of the Companies Act have been met.

Step 3: File with Companies House

You can file online through the Companies House web filing service or via a formation agent. The current fees are:

• Online filing: £50 — typically processed within 24 hours (often within a few hours).
• Paper filing: £71 — takes 8–10 working days.
• Same-day service: £78 — guaranteed incorporation on the same day if submitted by 3pm.

When you use a formation agent like Filing HQ, the agent handles the filing on your behalf — including the identity verification submission, registered office setup, and all the form preparation. Our formation packages bundle this with a registered office address and your first year of compliance support.

Step 4: Receive your certificate of incorporation

Once Companies House approves the application, you receive a certificate of incorporation confirming:

• The company name and registered number
• The date of incorporation
• That the company is a private company limited by shares

This is your company's birth certificate. From this date, all statutory deadlines begin — your first accounts are due 21 months later, your first confirmation statement 12 months later, and your Corporation Tax obligations are triggered by the commencement of business activity (not by the date of incorporation itself).

What happens immediately after formation

The certificate of incorporation is a starting gun, not a finish line. Within the first few weeks you should:

1. Set up your statutory registers — register of members, register of directors, register of directors' residential addresses, PSC register, and register of charges. These are the legally authoritative records of your company, not the Companies House public register. See our statutory registers guide for what each contains.
2. Open a business bank account. While not legally required for a UK limited company, it is practically essential: it reinforces the limited liability separation between personal and company finances, simplifies bookkeeping, and is required by most payment processors, investors, and lenders.
3. Register for Corporation Tax with HMRC — required within 3 months of starting business activity. Note: the trigger is business activity (invoicing, buying stock, signing contracts, advertising), not incorporation itself. If you incorporate but remain dormant, no CT registration is needed yet. Our Corporation Tax registration guide walks through the CT41G process.
4. Consider VAT registration — mandatory only once taxable turnover exceeds £90,000 in any rolling 12-month period (or you expect to exceed it in the next 30 days). Voluntary registration below the threshold is permitted and can be beneficial if your customers are VAT-registered.
5. Register for PAYE — required only if you pay salaries, including a director's salary. Not triggered by incorporation or by paying dividends. Must be registered before the first payday (ideally 2+ weeks earlier).

For a comprehensive walkthrough, see our post-incorporation checklist.

Ongoing compliance obligations

Once your company is live, the following annual obligations apply:

• Confirmation statement — due every 12 months. Online fee: £50. Must be filed even if nothing has changed. Missing it leads to strike-off proceedings, and administrative restoration costs £468+. See our confirmation statement guide.
• Annual accounts — first set due 21 months from incorporation, subsequent sets due 9 months after the accounting reference date. Late filing penalties start at £150 and climb to £1,500 for private companies. Our annual accounts guide covers deadlines and penalties in detail.
• Corporation Tax return (CT600) — due 12 months after the end of the accounting period. Corporation Tax payment is due 9 months and 1 day after the period ends.
• Statutory registers — must be maintained and kept up to date. Accounting records must be retained for at least 6 years from the end of the accounting period.
• Event-driven filings — appointing or removing directors (AP01/TM01), issuing shares (SH01), changing your registered office (AD01), PSC notifications — all have 14-day filing deadlines with Companies House.

Common mistakes founders make at incorporation

We see the same errors every week from founders who incorporated in a rush. Each one costs real time and money to fix.

Using a home address as the registered office

Your home address goes on the public record permanently — even after you change it. Every person with internet access can see where you live. A registered office service costs a fraction of the privacy it protects.

Issuing one share instead of a practical number

A single-share company cannot easily bring in a co-founder at anything other than 50/50, cannot grant employee share options without an additional issuance, and makes every future equity event more complex. Start with 100 or 1,000 ordinary shares at £1 each — it costs nothing extra and gives you room to manoeuvre.

Skipping identity verification

Since ECCTA took effect on 18 November 2025, Companies House rejects incorporation applications where directors and PSCs have not verified their identity. Founders who skip this step end up in a holding pattern, unable to complete formation until verification is done. Do it first.

Choosing a name too similar to an existing registration

Companies House applies a "same as" test that strips punctuation and common words. "The Green Coffee Company Ltd" and "Green Coffee Co. Limited" may be treated as the same name. Check thoroughly before falling in love with a brand.

Adopting bespoke Articles without understanding them

Some formation agents offer "enhanced" Articles with restrictive transfer provisions, weighted voting, or pre-emption clauses the founder did not ask for. These can block future investment rounds. If you do not have a solicitor reviewing bespoke Articles, stick with Model Articles — they are well-understood, investor-friendly, and easily amended later by special resolution.

Assuming incorporation triggers Corporation Tax

Corporation Tax registration is required within 3 months of starting business activity — not 3 months of incorporation. Business activity means invoicing, signing contracts, advertising, renting property, employing staff, or earning interest. If your company sits dormant after formation, you do not need to register for CT until activity begins. Registering prematurely creates unnecessary filing obligations.

How much does it cost to form a UK limited company?

The government fees are low:

• £50 for standard online incorporation (previously £12 before ECCTA fee changes)
• £71 for paper incorporation
• £78 for same-day incorporation

Beyond the Companies House fee, practical costs include:

• Registered office address service — typically £50–£150 per year
• Formation agent fee (if using one) — varies, often bundled with the registered office
• Bespoke Articles of Association — £500–£2,000+ if drafted by a solicitor
• Accounting software and bookkeeping setup — from £15/month

Filing HQ's formation packages bundle the Companies House fee, registered office, identity verification, and first-year compliance support into a single transparent price — no hidden extras, no surprise renewals.

Do you need a company secretary?

Private limited companies are not required to appoint a company secretary since the Companies Act 2006 removed this obligation. Public limited companies (PLCs) must still have one. Many private companies choose to appoint a secretary for administrative convenience — they can handle filings, maintain registers, and manage shareholder communications — but it is entirely optional.

Frequently asked questions

How long does it take to form a UK limited company?

Online incorporation through Companies House is typically processed within 24 hours — often within a few hours. Same-day service guarantees approval on the day of submission (if filed by 3pm). Paper filing takes 8–10 working days. However, identity verification for directors and PSCs should be completed beforehand, which can add a day or two if using the GOV.UK One Login route for the first time.

Can I form a UK limited company if I live abroad?

Yes. There is no UK residency or nationality requirement for directors or shareholders. You can form and run a UK limited company from anywhere in the world. You will need a UK registered office address (a service address qualifies) and must complete identity verification — which can be done through an ACSP regardless of where you live. See our guide to running a UK company from abroad.

Do I need a business bank account to form a company?

A business bank account is not legally required to form or run a UK limited company. However, it is practically essential: it maintains the separation between personal and company finances that underpins limited liability, simplifies bookkeeping, and is required by most payment processors and investors. Most banks require the certificate of incorporation before they will open a business account, so formation comes first.

What is the difference between a director and a shareholder?

Directors manage the company — they make day-to-day decisions and owe statutory duties under the Companies Act 2006. Shareholders own the company — they hold equity, receive dividends, and vote on major decisions like amending the Articles. In early-stage companies the same person is often both, but they are distinct legal roles with different rights and responsibilities.

Can I change my company name after formation?

Yes. A name change requires a special resolution (75% of shareholders) and filing form NM01 with Companies House. The fee is £20 online or £33 on paper. The change takes effect when Companies House issues a new certificate of incorporation on change of name. Our company name change guide covers the process in detail.

What happens if I do not file my confirmation statement?

Companies House will send warning letters and eventually begin compulsory strike-off proceedings. Once struck off, the company ceases to exist — its assets vest in the Crown, and restoring it administratively costs at least £468 plus professional fees and weeks of delay. The confirmation statement fee is £50 online; missing it is never worth the cost.