Setting up a limited company, step by step

Forming a company takes an hour online. Forming one properly — so the structure doesn't need expensive surgery later — takes the same hour with the right decisions. The steps, in order:

The eight steps

• 1. Check the name is available at Companies House and no trademark blocks it
• 2. Decide directors and shareholders — who controls, who owns
• 3. Set the share structure — the decision that's hardest to fix later
• 4. Choose a registered office (a service address keeps home private)
• 5. Incorporate at Companies House (usually done within 24 hours)
• 6. Register for corporation tax within 3 months of trading
• 7. Open a business bank account — company money is not your money
• 8. Set up PAYE if paying a salary; assess VAT position

Share structure: the one to get right

Issuing 1 share when you might later want to split ownership 60/40, or issuing shares equally to a couple when income-splitting flexibility would help, are the classics. Multiple share classes ('alphabet shares') let dividends differ per shareholder legitimately — far easier to build in at formation than to bolt on. If investors are ever on the roadmap, a clean class structure now saves legal fees later.

After incorporation

The company exists and so do its duties: annual accounts, confirmation statement, CT600, proper records, PAYE if salaried, and the discipline that company money moves only via salary, dividend, expense repayment or documented loan. Directors' loans that drift are where new directors most often get burned (s455 tax at 33.75% on unrepaid balances).

Our formation packages (£49–£199) make the decisions above with you, do every registration in order, and the startup plan carries straight into year-one compliance so nothing is discovered late.