Limited Company in the UK: Guideline to Essential Compliance

Learn all the required compliance and all the functional characteristics of a limited company in the UK. Be and stay compliant with our ultimate guidelines.

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Are you planning to start a limited company business in the UK? But are you still confused about its characteristics, benefits, or drawbacks? Then, this blog is your go-to guide to simplifying the characteristics, perks, and drawbacks of a UK-limited company.

Let’s unravel the essentials, making your entrepreneurial journey more transparent and manageable by understanding a limited company in the UK. 

What Is a Limited Company? 

A limited company is a distinct legal entity that exists separately from its owners. It is considered separate from its owners (shareholders) and directors, offering limited liability protection to its shareholders. This means that shareholders’ personal assets are typically safeguarded if the company faces financial difficulties or legal issues, barring any fraudulent or wrongful actions.

  • Limited companies can be either private (identified by “Ltd” at the end of their names) or public (identified by “PLC”—public limited company). The key distinction lies in the public company’s ability to offer shares and have its shares traded on the stock market.

  • Setting up a limited company involves registering it with Companies House, defining its structure, appointing directors and shareholders, and issuing shares.

  • This structure offers advantages such as limited liability, potential tax benefits, and credibility in the business world. However, it also entails compliance responsibilities, administrative tasks, and, in some cases, higher taxes than other business structures.

Different Types of Limited Companies

If you decide to launch a limited company in the UK, a crucial step is to choose a structure model for the limited company. There are two primary types of limited companies in the UK:

1. Private Limited Company

This is the most common form of a limited company. The “Ltd” suffix at the end of its name serves as a distinguishing feature. A private limited company restricts the transfer of shares and prohibits public trading.

It requires at least one director and one shareholder (who can be the same person) and cannot offer shares to the public. Ownership can be closely held, providing autonomy in decision-making.

  • Examples of Private Limited Companies: Arcadia Group Ltd., Dyson Ltd., Innocent Drinks Ltd., Joseph Cyril Bamford Ltd., and Monzo Bank Ltd. are a few private limited companies.
  • Types of Private Limited Companies:  Private limited companies are primarily divided into two types:

i. Private Limited Company by Shares

This is the most common form of private limited company. The shareholders who own the company are only responsible for its debts up to the amount of their investment. Shares in a private limited company can be sold to anyone but cannot be offered to the public.

ii. Private Limited Company by Guarantee

A private limited company, by guarantee, is a type of company that does not have shareholders. Instead, it has members who agree to contribute a certain amount of money to the company if it goes bankrupt. Members of a private limited company can get their share of the profits by guarantee, but only if the company’s articles of association allow it. The company will not be eligible for charitable status if the profits are distributed.

In addition to the two main types of private limited companies, there are several other limited companies, including:

  • Private Unlimited Company.
  • Community Interest Company.
  • Right-to-manage Company.
  • and Flat Management Company.

Private Unlimited Company

A private unlimited company is a business structure in the United Kingdom that combines a limited company’s benefits with an unlimited company’s privacy. Like a private limited company, a private unlimited company is a separate legal entity from its owners, and its owners have limited liability for the company’s debts. 

However, unlike a private limited company, a private unlimited company is not required to file its accounts with Companies House, meaning its financial information is not publicly available.

Community Interest Company

A CIC, or community interest company, is a limited company that benefits the community. This type of LTD company is a non-profit organization that exists to benefit the community rather than the shareholders. It must have a social purpose and reinvest its profits to fulfill that purpose.

CICs have several unique features, such as the requirement to have a community interest statement and to distribute profits for the benefit of the community.

Right-To-Manage Company

An RTM, or Right-To-Manage company, is a limited company that tenants form to manage their landlord’s property. Apartment building leaseholders established this limited-by-guarantee company to take over management of the complex from building freeholders. The RTM company is responsible for all aspects of the building’s management, including:

  • Collecting and managing the service charge.
  • Upkeeping the communal areas.
  • Upholding the structure of the building.
  • Dealing with complaints from other leaseholders.

Flat Management Company

A flat management company (FMC) is a limited company in the United Kingdom specifically formed to manage the common areas of a block of flats. This includes hallways, stairwells, gardens, and communal facilities such as gyms or swimming pools.

In a flat management company, individuals who own the flats within a building or development are usually shareholders in the management company. Each shareholder typically holds a share in the company, granting them rights and responsibilities related to property management.

2. Public Limited Company (PLC) 

PLCs are suitable for larger businesses seeking to raise capital by trading shares publicly on the stock exchange. They bear the suffix “PLC” and are subject to stricter regulatory requirements.

It requires a minimum share capital of £50,000, with at least 25% of shares issued before it can trade. PLCs face more rigorous reporting and regulatory requirements due to their public nature.

Examples of Public Limited Companies (PLCs): Unilever PLC, Vodafone Group PLC, Tesco PLC, and Jaguar Land Rover Automotive PLC are some significant examples of public limited companies.

Key Characteristics of a Limited Company in the UK

Whether a public or private limited company, a limited company is its own legal entity in charge of its money, debts, and contracts. Shareholders invest in the company by purchasing shares and are involved in decision-making through voting rights based on their shareholding. 

Understanding these key features is crucial for individuals seeking to establish, operate, or invest in such entities. Here are the fundamental features of a limited company in the UK:

  • Separate Legal Entity: A limited company is legally distinct from its owners (shareholders) and directors. It can conduct business, own assets, enter contracts, and take legal actions independently.

  • Limited Liability: A shareholder’s liability is limited to the amount they put into the business or agreed to pay for their shares. Personal assets are typically protected, except in misconduct or fraudulent activities.

  • Perpetual Succession: The continuity of the company’s existence is unaffected by changes in ownership or membership, ensuring its ongoing operations despite alterations in shareholders or directors.

  • Share-based Ownership: The quantity of shares held by shareholders determines ownership in a limited company. Shareholders’ rights, such as voting and dividends, are often in proportion to their shareholding.

  • Management by Directors: Day-to-day operations and decision-making fall under the purview of directors responsible for lawful company administration.

  • Financial Reporting and Compliance: Limited companies must maintain accurate financial records, prepare annual accounts, and submit statutory documents to regulatory bodies like Companies House.

  • Designation Indicators: The designation at the end of a limited company’s name denotes its structure and legal status. “Ltd” signifies a private limited company, while “PLC” denotes a public limited company.

  • Share Capital: Companies issue shares to shareholders, representing ownership. Shareholders can be individuals or corporate entities, and the company’s capital is divided into shares of various values.

These fundamental characteristics define the essence of a UK limited company, shaping its legal responsibilities, operational framework, and relationships within the business structure.

How to Set up a Limited Company in the UK

Setting up a limited company in the UK involves creating a legal business structure separate from its owners, providing limited liability and distinct legal status. Specific requirements, compliance, and documents are needed to form and register a company properly. 

Formation Requirements, Compliance, and Documents 

Once you decide to form a limited company in the UK, you must be prepared to comply with the formation process and the required documents. When setting up a public or private limited company in the UK, compliance with formation processes and documentation requirements is crucial for legal and operational standing.

  • Choose a Company Name in the UK: Select a unique company name that adheres to the guidelines of Companies House. Ensure the chosen name is available and not already in use.
  • Register with Companies House: All limited companies must be registered with Companies House following the Company Act 2006 by filing the IN01 Form, whether private or public. 

File the IN01 form, compile it, and submit the necessary documents to Companies House. This involves providing information about the

  1. Company’s full name.
  2. types of business/ SIC code.
  3. Situation of registered office.
  4. Proposed Registered office address
  5. principle business activities.
  6. details about directors and shareholders.
  7. Details about the company secretary.
  8. statement of share capital.
  9. and details about legal entities such as People with significant control (PSC).

How to complete the form IN01

  • Required Address: A limited company in the UK requires different addresses: a registered office address, a service address, and a virtual company address.

    • Designate a registered office address for official correspondence. Ensure the address is a physical location within the UK jurisdiction. This is a legal requirement for all companies registered at Companies House in the UK.

    • A virtual company address is when a company uses an address to get mail or official letters, even though they don’t have an actual physical office there.

    • Service addresses in the UK serve several essential purposes, especially for individuals associated with a company, such as directors, company secretaries, and sometimes shareholders.

Business Globalizer can assist you in acquiring the necessary addresses if you are a non-resident and new to conducting business in the United Kingdom.

  • Ownership Structure: Define ownership structure with details about shareholders, their shares, and their respective ownership percentages depending on company structures.

  • UTR Number: Obtain a UTR number from HM Revenue & Customs (HMRC) for tax purposes. 

    • As a limited company, your business must provide its UTR number when registering for corporation tax online or by post. All UK businesses that are required to pay taxes receive a Unique Taxpayer Reference (UTR) number from His Majesty’s Revenue and Customs (HMRC).

  • Memorandum of Association: Outlines the company’s objectives, powers, and scope of operations.

  • Articles of Association: Details the company’s internal regulations, governance, and shareholders’ rights.

  • Standard Industrial Classification (SIC) Code: Determine and register the primary business activity using the appropriate SIC code.

  • The Certificate of Incorporation: As proof that the company is registered, get a Certificate of Incorporation as a public limited company or private limited company once the application is approved.

Most business owners make typical or patterned mistakes while forming a limited company because of insufficient knowledge and proper guidance. Don’t worry; with our professional advice, you can easily avoid those common mistakes while forming a limited company in the UK.

You can use online services specializing in company formations like Business Globalizer to ensure all legal requirements are met. 

Ownership Structure and Authorities

You may wonder who is included when establishing your limited company structures and authorities in the UK. Let’s learn: 

Ownership Structure of a Public Limited Company

In a public limited company (PLC) in the UK, the ownership structure and authority differ from those of a private limited company (Ltd). Here’s an overview:

  • Shareholders: PLCs can have many shareholders, and their ownership is based on how many shares they own. Shareholders have voting rights in the company’s decision-making processes, typically at general meetings.
  • Board of Directors: The board is responsible for the overall management and decision-making of the company. It comprises executive and non-executive directors. While executive directors are involved in day-to-day operations—including the director’s role and responsibilities for a limited company—non-executive directors provide independent oversight and guidance.
  • Company Officers: These individuals can include the company secretary (if appointed) and other officers involved in administrative or management roles.

Establishing Structures and Authorities of a PLC

  • Formation: When establishing a public limited company, there’s a requirement to have at least two directors, one of whom must be an individual. Additionally, there should be a company secretary. The company needs a minimum share capital before it can be incorporated.
  • Share Capital: PLCs issue shares to raise capital from the public. They can issue shares through an Initial Public Offering (IPO) or subsequent public offerings to investors.
  • Authorities: The authority within a PLC is distributed among shareholders and the board of directors. Shareholders hold ultimate authority and make significant decisions through voting at general meetings. They approve major company changes, elect the board of directors, and may vote on matters affecting the company.

  • Executive Authority: In a public limited company, the board of directors, under the leadership of the chairperson or CEO, possesses board authority. They oversee day-to-day operations, formulate strategies, and make decisions on behalf of the company. The board’s actions must align with the shareholders’ interests.

Ownership Structure of a Private Limited Company

  • Formation: Establishing a private limited company requires at least one director, who can also be the sole shareholder. Unlike public companies’ requirements, a company secretary is optional for private companies.
  • Share Capital: Ltds can be formed with minimal share capital, making them popular for startups and small businesses. Shares are often divided among the founding members or investors.
  • Authorities: In a private limited company, decision-making authority is more centralized. The shareholders have a lot of power, but they usually work closely with the directors, who are involved in making decisions and running the business day-to-day.

Regulatory Differences between PLC and Ltd

  • Corporate Governance: While governance principles are essential for both types of companies, private limited companies have less stringent regulatory obligations than PLCs. They must still abide by all applicable laws and regulations, though.
  • Disclosure Requirements: Pvt. Ltd. companies have fewer disclosure requirements than PLCs. Their financial information is not publicly available, offering more privacy regarding financial details.

Understanding these differences in structures and authorities helps prospective business owners choose the most suitable entity for their ventures, considering factors like size, ownership distribution, regulatory obligations, and long-term goals.

Learn more about Ltd vs. PLC here.

Annual Filings, Requirements, Reportings, and Compliance of a Limited Company in the UK

Financial transparency and adherence to statutory requirements are fundamental pillars for a limited company’s operations in the UK. Financial reporting, compliance, and statutory obligations collectively form the backbone of a company’s legal and regulatory framework. 

  • Annual Financial Statements: Limited companies must prepare annual financial statements that include a balance sheet, profit and loss account, cash flow statement, and notes. These statements provide an overview of the company’s financial position, performance, and cash flow for the accounting period.
  • Accounting Standards: Financial statements must adhere to the UK’s Generally Accepted Accounting Practice (GAAP). This includes following specific accounting standards such as FRS 102 or IFRS (International Financial Reporting Standards) for larger companies.
  • Auditing: Unless exempt (for very small companies), limited companies must have their financial statements audited by a registered auditor. Auditors provide an independent opinion on whether the financial statements give an accurate and fair view of the company’s financial position.
  • Directors’ Report: Directors of the company are required to prepare a directors’ report outlining essential information about the company’s performance, activities, financial position, and future prospects. It is one of the responsibilities of the director.
  • Companies House Filings: Limited companies must file various documents with the Companies House. This includes: 
  1. Annual Accounts: Annual accounts are reports created after a financial year to highlight the performance of the business during the accounting period. Limited companies must prepare and file their prepared annual accounts with Companies House within a specified deadline, typically nine months after the end of the financial year. The filing process can be done online or by post.
  2. Confirmation Statement and Company Renewal: Annual filing for renewal in the Companies House register is a mandatory process for all companies registered in the UK. It involves submitting a “Confirmation Statement” to Companies House that confirms the accuracy of the information held about the company. This includes details and information changes such as the company’s registered office address, directors, shareholders, and people with significant control (PSCs). Limited companies must file their “Confirmation Statement” at least once a year.
  3. Changes to Company Details in Company Structure:  such as director appointments or resignations and any alterations to the articles of association.
  • Corporation Tax Returns: Companies must file a corporation tax return—submitting the CT600 Form—with HM Revenue & Customs (HMRC) within a specified period, usually within twelve months after the accounting period ends. This return reports the company’s taxable profits and calculates the corporation tax due.
  • VAT Returns: If the company’s annual turnover exceeds the VAT threshold, it must register for VAT and submit VAT returns to HMRC.
  • PAYE (Pay As You Earn): If the company employs staff, it must deduct income tax and National Insurance contributions from employees’ salaries and report this to HMRC through the PAYE system. Register for PAYE (Pay As You Earn) and establish a workplace pension if you plan to hire employees. 
  • Compliance with Legal and Regulatory Requirements: Ensure compliance with other legal obligations such as GDPR (General Data Protection Regulation), health and safety regulations, employment laws, and industry-specific regulations.
  • Maintaining Records: Maintain accurate accounting records, including invoices (company invoices, VAT invoices, etc.), receipts, payroll records, and minutes of meetings.

Within the framework mentioned above, statutory compliance is pivotal in maintaining the company’s legality and credibility. Failure to comply with these reporting and compliance requirements can result in penalties, fines, or legal consequences like compulsory liquidation for the company and its directors. 

Benefits of a Limited Company in the UK

Now that you know the critical features of limited companies, you may wonder why you must set up a limited company. Why should you consider this move?   

Setting up a limited company offers several advantages that suit your business. While this decision involves complexities and considerations, the benefits are worth examining closely.

Here are some reasons why you might consider forming a limited company:

Potential Advantages of Limited Company

  • Limited Liability: Generally, shareholders’ personal assets are shielded from the company’s obligations. Their liability is limited to the value of their shares, shielding personal wealth in the event of financial issues or legal claims against the company.
  • Credibility and Perception: Operating as a limited company often enhances credibility in the eyes of clients, suppliers, and potential investors. It can lend a sense of stability and professionalism, which may attract more business opportunities.
  • Tax Efficiency: Limited companies enjoy various tax advantages, including lower corporate tax rates and allowances on profits than personal income tax rates. They can also use certain deductible expenses, allowances, and tax planning strategies.
  • Separate Legal Entity: As a separate legal entity, a limited company can conduct business, enter contracts, own assets, and sue or be sued in its own name, offering flexibility and protection to its owners.
  • Access to Funding: Limited companies can access diverse funding options, including bank loans, shareholder investments, and the ability to issue shares or seek venture capital or angel investment.

However, these advantages of setting up a limited company go hand in hand with potential downsides and added responsibilities. When considering this strategic move, let’s uncover the flip side:

Potential Disadvantages of Limited Company

  • Administrative Burden: Limited companies have increased administrative responsibilities compared to sole traders or partnerships. This includes maintaining detailed financial records, filing annual accounts, and adhering to statutory requirements, which can be time-consuming and costly.
  • Disclosure Requirements: There’s a higher level of transparency and disclosure required for limited companies. Financial information, including annual accounts and reports, is publicly available through Companies House, which might reveal sensitive business details.
  • Higher Taxation: While limited companies have tax advantages, they might face higher overall taxation in specific scenarios. Withdrawals of profits through salaries or dividends can be subject to personal income tax, potentially resulting in double taxation.
  • Complexity and Regulation: Limited companies’ legal and regulatory frameworks can be complex. Compliance with regulations and changes in legislation may require professional advice and expertise, incurring additional costs.
  • Less Privacy: Limited companies have a level of public disclosure, meaning certain information, including company details and financial records, is accessible to the public. This reduces privacy compared to other business structures.

Understanding these pros and cons helps you decide whether establishing or operating as a limited company aligns with their business goals and circumstances.

Taxation of Limited Companies

Understanding taxation is crucial for any business entity. Limited companies are subject to corporate tax on their profits, and shareholders face taxation on dividends received. National insurance contributions, capital gains tax, and value-added tax may also come into play based on the company’s activities and circumstances.

In the UK, private and public limited companies are subject to taxation, but there are differences in their reporting requirements and some aspects of taxation. Here’s a brief overview:

Corporate Taxation

  • Private Limited Company (Ltd): A private limited company is taxed on its profits through corporation tax through a CT600 Form. Profits made by the company are subject to the corporation tax rate. Rates can vary, and there have been changes in the UK government’s plans to adjust these rates over time.
  • Public Limited Company (PLC): Public limited companies are also subject to corporation tax on their profits. The tax rate applicable to PLCs is the same as for private limited companies.

Reporting Requirements

  • Private Limited Company (Ltd): Private limited companies have less stringent reporting requirements than public limited companies. They have certain tax exemptions and simplified reporting standards in financial statements, disclosures, and annual filings.

  • Public Limited Company (PLC): PLCs have more extensive reporting requirements than private limited companies. They are subject to more stringent disclosure and compliance obligations because they are listed on a stock exchange and have public shareholders.

Shareholder Aspects

  • Private Limited Company (Ltd): Typically, private limited companies restrict the transfer of shares and the number of shareholders. Shares are unavailable for public trading.

  • Public Limited Company (PLC): PLCs, on the other hand, can offer shares to the public and are listed on stock exchanges. They can have many shareholders, and their shares are freely tradable on the stock market.

Tax Planning and Regulations

Both private and public limited companies must adhere to tax regulations and plan their finances accordingly. This may involve using available allowances, reliefs, and tax-efficient strategies to manage their tax liabilities.

Changes in Regulations

Taxation laws and regulations are subject to change by the UK government. These changes can impact how companies are taxed, the rates applied, available deductions, and allowances. Staying updated with the current tax laws is essential for private and public limited companies to ensure compliance.

Note 1: Specific tax implications can vary based on various factors, including the nature of the business, sector-specific regulations, and recent legislative changes. So, seeking advice from a qualified accountant or tax advisor is highly recommended for accurate and personalized guidance concerning taxation for private and public limited companies in the UK.

Note 2: There are different rates of corporation tax depending on the company’s profits. As of April 2023, the main rate is 25% for profits above £250,000, and a lower rate of 19% applies for profits of £50,000 or less.

Businesses earning profits between £50,001 and £250,000 will benefit from a marginal relief rate of 26.5 percent. This means their corporation tax rates will gradually increase for profits that are within these limits, instead of jumping to a higher rate immediately. Marginal relief ensures a smoother transition in tax rates for companies as their profits grow from the lower to the upper threshold.

Dissolution of a Limited Company in the UK

A company dissolution means the company is removed or struck off from the Companies House register and stops existing legally. Once dissolved, the company can’t trade and legally ceases to exist.

Company Dissolution

Company dissolution can happen voluntarily or compulsorily:

  • Voluntary Dissolution

Company owners dissolve it when they feel it’s no longer needed. Reasons include the business completing its purpose, not getting started, or avoiding ongoing costs like filing fees. If a company misses its account deadline, owners might choose dissolution to avoid fines.

  • Involuntary/Compulsory Dissolution

Companies House can dissolve a company if it doesn’t meet filing obligations like the confirmation statement, annual accounts, or tax returns.

Company Strike-Off

When a limited company’s name is taken from the Companies House register, it’s a company strike-off. After a company goes through the strike-off process, it disappears and can’t do business, pay bills, or sell its assets anymore.

There are two types of company strike-offs in the UK.

  • Voluntary Strike-Off: If a company is solvent and its directors decide to cease operations, they can opt for voluntary strike-off. This process involves ceasing trade, settling debts, distributing assets among shareholders, and submitting a DS01 form to Companies House.
    Once the DS01 form is submitted, there’s a two-month waiting period (which can be extended to three months in some instances), allowing interested parties to object to the dissolution if they have concerns.

  • Compulsory Strike-Off: A company can be forced to go through a strike-off. Usually, this happens because a creditor (someone the company owes money to) is upset, or Companies House insists on it because the company hasn’t submitted its annual accounts. This is called a compulsory strike-off.

Liquidation of a Limited Company

Failure to adhere to reporting and compliance obligations can lead to scenarios necessitating the dissolution of a company through the liquidation of a limited company. Penalties for non-compliance may prompt legal action from creditors or regulatory bodies, potentially leading to the forced liquidation or striking-off of the company. Directors might face disqualification or personal liability for company debts if found responsible for non-compliance.

Company Liquidation

Liquidation happens when a company can’t pay its debts. In this process, the company’s assets are sold to pay the people or organizations it owes money to, which are called creditors. Liquidation can happen in two ways:

1. Voluntary Liquidation: Voluntary liquidation in the UK is a formal insolvency proceeding that allows a financially distressed company to wind up its affairs and cease operations. Two types of voluntary liquidation are available in the UK:

  • Members’ Voluntary Liquidation (MVL): In the case of a solvent company, shareholders can opt for an MVL. A licensed insolvency practitioner is appointed to oversee the process of realizing assets, settling liabilities, and distributing remaining funds among shareholders.
  • Creditors’ Voluntary Liquidation (CVL): When a company becomes insolvent and cannot pay its debts, directors or shareholders may decide to initiate a CVL. An insolvency practitioner is appointed to liquidate assets, repay creditors to the extent possible, and formally dissolve the company.

2. Compulsory Liquidation: In this liquidation process, creditors, shareholders, or regulatory authorities can start this court-led process if a business goes bankrupt or does not follow its legal obligations. The court appoints a liquidator to wind up the company’s affairs and distribute assets to creditors.

Specific legal procedures govern all liquidation and dissolution processes, whether voluntary or not. To navigate these processes properly, seek professional advice from insolvency practitioners or legal advisors.

Additional Tips for Running a Limited Company

There are still some things you need to do to complete the process of setting up a limited company. Running a limited company comes with various legal duties and responsibilities that you should be aware of as a director, including: 

  • Declare Interests in Transactions: If you have a personal interest in any company transaction, you must ensure that such transactions or interests are recorded in the company’s registers and that board approval is obtained when necessary.
  • Considering Stakeholders or Employees: As a director, you must consider the interests of employees, customers, and suppliers and the impact of business operations on the environment and the community. 
  • Act within the Company’s Constitution: Running a limited company comes with the duty to act within the company’s constitution. You must ensure the company’s activities and decisions comply with its Articles of Association and shareholder agreements.
  • Trademark Registration: A trademark registration for a limited company in the UK is the legal process of officially recording and protecting a distinctive sign, symbol, or logo associated with the company’s goods or services. Trademark registration is necessary to safeguard your company’s intellectual property and brand identity.
  • Maintain Financial Records: Limited companies must maintain accurate financial records, such as preparing and submitting annual financial statements, according to legal requirements. In this case, proper accounting and bookkeeping can prove helpful.
  • Avoid conflicts of Interest: Directors of your limited companies must avoid conflicts of interest. This means they must not make decisions that benefit themselves or their associates at the company’s expense.
  • Paying Taxes: Most importantly, limited companies must pay corporation tax on their profits. Pay your dues to the tax collector—corporation tax, VAT, and others, as applicable. Don’t forget to plot your course with accurate and timely tax returns.
  • Corporate Reporting: Report any significant changes in the company’s structure or activities to the relevant authorities (HMRC, Companies House).

If you are entirely new and have started your business at the entry-level, you may first face challenges running a limited company in the UK. In this case, we suggest you consult with business legal experts.


  1.  Do I need Companies House to set up a company online? 

Answer: Companies House is the government agency that registers businesses in the UK. If you formed your business as a sole trader, you don’t need Companies House. But to set up a limited company online, you must register with Companies House. You can set up your company by registering online through the Companies House website.

  1. Can a foreigner set up a limited company in the UK?

Answer: Yes. A foreigner can set up a limited company in the UK with proper compliance and a few requirements. Look at our UK company formation packages according to your budget and needs. 

  1. What is the price of registering a limited company? 

Answer: The cost of registering a company depends on the formation agent and the place where your business will be formed in the UK.

  1. Can anyone be a company director?

Answer: According to the Companies Act 2006, every company must have at least one director who is a natural person, not a company. Also, since October 1, 2008, the director’s youngest age is 16 years old.

  1. What is the Companies House?

Answer: Companies House is a government organization in the UK that keeps a public record of company information. It records details like who runs a company, its structure, and other vital facts. This information is available for anyone to look at.

Bottom Line

Understanding a limited company in the UK is vital to navigating the business landscape with clarity and confidence. It’s a distinct legal entity, offering aspiring entrepreneurs limited liability protection and credibility. Embracing its advantages while acknowledging its responsibilities ensures a solid foundation for a thriving business journey.

Deciding whether to establish your business as a limited company involves a thorough assessment of your goals, the nature of your business, your tolerance for administrative obligations, and the level of protection you seek for personal assets.

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