Setting Up a Limited Company: Step-by-Step
A plain-English walkthrough of company formation, tax registrations, records, banking, and first-year compliance.
Last reviewed: 2 June 2026
Decide whether a company is right
A limited company can offer credibility, limited liability, and tax-planning flexibility. It also brings more admin, including company accounts, Corporation Tax, confirmation statements, payroll decisions, and director responsibilities.
Set up the basics carefully
Before incorporation, decide the company name, registered office, directors, shareholders, share structure, SIC codes, and articles of association. These choices can affect banking, tax, investment, and future ownership changes.
Register for taxes when needed
Most companies need Corporation Tax registration. VAT and PAYE depend on turnover, staffing, and director salary decisions. Registering too late can create penalties; registering too early can create unnecessary admin.
Build the admin system from day one
Open a separate business bank account, choose bookkeeping software, keep invoices and receipts, and set calendar reminders for Companies House and HMRC deadlines. Cleaning up records after the first year usually costs more than getting the setup right early.