Setting up a limited company: the basics

Setting up a limited company is relatively easy – in theory! Here are the basic steps you need to complete to begin trading:

1. Identify your directors
When first starting out, chances are that you are the sole director. You can nominate other directors or company secretaries if required.

2. Issue shares
For simplicity we will assume that you are the only shareholder. You should create a ‘statement of capital’ that outlines the value of all shares and the names and addresses of all shareholders.

3. Set out your Articles of Association
These are the rules you define which set out how your company is run. All of your shareholders, directors and company secretaries need to agree to these terms. You can find an example of an article of association on the HMRC website.

4. Register with Companies House
Armed with all this information, you can now register your limited company with Companies House. You can complete the registration online yourself for just £15, or secure the services of a third party who will be able to walk you through the process.

5. Register for Corporation Tax
Finally, you or your limited company accountant need to get in contact with HMRC to register for corporation tax. This is the last step to full limited company status because you will need the company registration number from step 4 to complete the HMRC process. You can complete the Corporation Tax registration process online here.

So there you have it – 5 simple steps to setting up a limited company!

Once this is done, you may also want to register the company as an Employer, for VAT and yourself for self-assessment.