Choose the right structure
A limited company is a separate legal entity from you. This provides personal liability protection - your personal assets are generally protected if the business fails - but creates ongoing compliance obligations that sole traders don't face.
Is a limited company right for you?
Understand the advantages and responsibilities of incorporating.
Incorporate your company
Registering with Companies House creates your legal entity. You'll need to choose a company name, appoint at least one director, and register an official address. Online incorporation typically completes within 24 hours and costs £100 (from February 2026).
Register your company
Register with Companies House - usually takes 24 hours online.
Tax registration
Once incorporated, you must register for Corporation Tax within 3 months of starting to trade. Corporation Tax is charged on your company's profits: 19% on profits up to £50,000 and 25% on profits over £250,000, with marginal relief in between.
Register for Corporation Tax
You must register within 3 months of starting to trade.
Director duties and compliance
As a director, you're legally responsible for running the company properly. This includes maintaining statutory registers, filing annual accounts and confirmation statements, and acting in the company's best interests. Failure to comply can result in personal liability and disqualification.
Understand director responsibilities (opens in a new tab)
Directors have legal duties to the company and shareholders.
Set up a business bank account
Limited companies must have a separate business bank account.
Keep company records (opens in a new tab)
What company records you must keep and for how long.
File annual accounts (opens in a new tab)
Companies must file accounts with Companies House every year.
File confirmation statement (opens in a new tab)
Annual confirmation of company details - due every 12 months.
Extract money from your company
Directors typically take income through a combination of salary (which attracts NI but is deductible for Corporation Tax) and dividends (lower tax rates but can only be paid from profits). Understanding the tax implications helps optimise your take-home pay.
Understand dividend tax (opens in a new tab)
Directors often take income as dividends - know the tax implications.
Check if you need to register for VAT
You must register for VAT when your taxable turnover passes the registration threshold in any rolling 12 months, or when you expect it to pass the threshold within the next 30 days alone.
Choosing the right business insurance
Start with the insurance the law requires: if you employ anyone, you must have employers' liability insurance with at least £5 million cover, and business vehicles need motor insurance.