Company Formation

Setting up a limited company costs vary from £150-£500 for professional formation services plus £12-£100 in government fees. The basic Companies House incorporation fee is £12 online or £40 by post, with same-day service costing £100. Professional legal services typically cost £150-£500 for standard formations, rising to £500-£1,500 for complex structures with bespoke articles of association. Additional costs may include registered office services (£50-£200 annually), company secretary services (£200-£500 annually), and accounting setup. Many formation packages include statutory books, certificates, and basic compliance guidance.

A limited company is a separate legal entity with limited liability protection for directors and shareholders, while sole traders have unlimited personal liability for business debts. Limited companies pay corporation tax on profits (19-25%) and can be more tax-efficient for higher earners, while sole traders pay income tax on all profits. Companies have greater credibility with customers and lenders but face more regulatory obligations including annual filings with Companies House. Sole trader setup is simpler and cheaper but offers no asset protection. Companies can also raise investment more easily and have perpetual existence beyond the founder.

While you can form a company yourself through Companies House or online formation services, using a solicitor ensures proper structure selection, bespoke articles of association, optimal share structures, and compliance with all legal requirements. Solicitors provide valuable advice on tax implications, future investment planning, and governance structures that DIY formations often miss. For simple single-director companies, basic formation services may suffice, but businesses planning growth, multiple shareholders, or investment should use qualified legal advice. Professional formation also includes ongoing compliance guidance and relationships for future legal needs.

Standard UK company formation takes 24 hours through Companies House online services, or 8-15 days by post. Same-day formation is available for £100 additional fee when needed urgently. Professional formation services typically take 2-5 working days to prepare documentation and submit applications. Complex formations with bespoke articles or multiple share classes may take 1-2 weeks for document preparation before submission. After incorporation, you'll receive the certificate of incorporation and can begin trading immediately. Post-formation setup including bank accounts, HMRC registration, and insurance may take additional weeks to complete.

Companies must file annual confirmation statements (£13 fee) and annual accounts within specified deadlines. Corporation tax returns are due 12 months after year-end, with tax payments due 9 months and 1 day after period end. Companies must maintain statutory registers of directors, shareholders, and persons with significant control (PSCs), and notify Companies House of changes within 14 days. Regular board meetings should be held with proper minutes maintained. VAT registration is required if turnover exceeds £85,000. Companies must also comply with employment law, health and safety regulations, and industry-specific requirements. Failure to meet obligations can result in fines or company dissolution.

Yes, you can change your company name after incorporation by special resolution and filing Form NM01 with Companies House. The change costs £10 online or £40 by post, with same-day service available for £100. You must ensure the new name complies with company naming rules and isn't already in use. Name changes require updating all company stationery, contracts, bank accounts, and registrations. Some contracts may include provisions about name changes, and you should check loan agreements and commercial contracts. The change takes effect when Companies House issues the certificate of change of name.

Share structures depend on your business objectives, funding plans, and ownership arrangements. Simple single-class ordinary shares suit most small businesses. Multiple share classes allow different voting rights or dividend entitlements, useful when bringing in investors or family members. Alphabet shares (A, B, C shares) enable different dividend rates for tax planning. Growth companies often create option pools for employees. If planning investment, consider creating preference share classes for investors with enhanced rights. Your solicitor can design optimal structures considering tax efficiency, governance needs, and future funding requirements while ensuring compliance with Companies House rules.

Private companies are not legally required to have a company secretary since 2008, though many choose to appoint one. Company secretaries help with compliance, maintain statutory records, organize board meetings, and ensure regulatory filings are completed on time. For small companies, directors can handle these duties themselves. Larger companies or those with complex structures often benefit from professional company secretary services (£200-£500 annually) to ensure proper governance and compliance. Public companies must have a qualified company secretary. If you appoint a secretary, they must be registered with Companies House and their details appear on public record.