How to Set Up a Limited Company 2026/27: The Complete Step-by-Step Guide
Set up a UK limited company 2026/27: the £100 Companies House fee, what you need (name, office, director, PSC, SIC), ECCTA identity checks and Corporation Tax.
A practical, step-by-step guide to incorporating a UK limited company in 2026/27. It costs £100 to register online with Companies House (usually done within 24 hours), or £124 by post. This page covers what you need before you start, how to register, the new identity verification rules under the Economic Crime and Corporate Transparency Act (mandatory from 18 November 2025), registering for Corporation Tax within 3 months, and the ongoing accounts and confirmation statement duties that follow.
2026/27 formation key figures
Online registration fee
£100
From 1 Feb 2026 (was £50). Usually live within 24 hours.
Register for Corporation Tax
3 months
Of starting to do business (tell HMRC you are active)
Confirmation statement
Every 12mo
£50 online from 1 Feb 2026
1. Should you incorporate?
A limited company is a separate legal entity from you. It gives limited liability - your personal assets are generally protected if the business runs into debt - and, once profits are higher, it can be more tax-efficient because you can take a small salary plus dividends rather than paying Income Tax and Class 4 National Insurance on all your profit as a sole trader would.
The trade-offs are more admin, more public disclosure (your accounts and directors are on the public register), and the cost of running payroll and filing company accounts. There is no single profit figure at which incorporation always wins - it depends on how much you draw versus reinvest, your appetite for admin, and how much you value the liability protection. We keep the full comparison in a dedicated guide rather than duplicating it here.
Decide first: Sole trader vs limited company - the full tax and liability comparison with worked examples.
2. What you need before you start
Gather these six things before you open the Companies House form. Having them ready means the online incorporation takes minutes rather than a stalled evening.
| Requirement | What it means |
|---|---|
| Company name | Must end in "Limited" or "Ltd" (Welsh: "Cyfyngedig"/"Cyf"). Cannot be the same as an existing registered name, cannot be offensive, and cannot use "sensitive" words (e.g. implying government links) or protected words without permission. Check availability on the Companies House register first. |
| Registered office | A physical address in the UK, in the same country the company is registered in (England & Wales, Scotland or Northern Ireland). It is on the public record and must be an "appropriate address" where post can be acknowledged. A home address works but is public; many use an agent's or accountant's address instead. |
| Director(s) | At least one director, who must be aged 16 or over (Companies Act 2006 s.157). A company secretary is optional. Each director's identity must now be verified (see section 4). |
| Shareholder(s) | At least one shareholder for a company limited by shares (or a guarantor for a company limited by guarantee). The shareholder can be the same person as the director. You set out the shares in a statement of capital. |
| SIC code(s) | One or more Standard Industrial Classification codes identifying what the company does. You can list up to four. |
| People with Significant Control (PSC) | Details of anyone who owns more than 25% of shares or voting rights, can appoint or remove directors, or otherwise exercises significant control. For a one-person company, that is usually you. |
You also adopt a memorandum of association (a legal statement that the subscribers agree to form the company) and articles of association (the written rules for running the company). Most new companies use the standard "model articles" without amendment.
3. How to register, step by step
- Choose your route. Register online with Companies House for £100 (usually incorporated within 24 hours), by post on form IN01 for £124 (8 to 10 days), or through a formation agent or third-party software.
- Verify your identity. From 18 November 2025 every director and PSC must complete identity verification (see section 4). Do this before or as part of the application.
- Complete the application. Enter the name, registered office, directors, shareholders and statement of capital, SIC codes, PSC details, and confirm the articles. Pay the fee by debit or credit card.
- Receive incorporation. Companies House checks and, if all is in order, incorporates the company - usually within 24 hours online. You receive a Certificate of Incorporation showing your company number and date of formation.
- Watch for your UTR. HMRC posts a 10-digit Unique Taxpayer Reference (UTR) to your registered office, usually within 14 days. You need it to register for Corporation Tax.
The fee schedule changed on 1 February 2026: online incorporation rose from £50 to £100 (it had already risen from £12 to £50 in May 2024). The increases fund Companies House's expanded role in tackling economic crime under the ECCTA.
4. Identity verification (ECCTA)
The Economic Crime and Corporate Transparency Act 2023 (ECCTA) introduced identity verification for people who set up, run or control companies. From 18 November 2025 it is mandatory: every new director and every new individual person with significant control must verify their identity when the company is incorporated (or when they are later appointed).
- How to verify: directly with Companies House online using GOV.UK One Login, in person at a Post Office, or through an authorised corporate service provider (ACSP) - typically an accountant or formation agent registered with Companies House.
- Existing companies: directors and PSCs of companies formed before 18 November 2025 verify during a 12-month transition, generally by their next confirmation statement.
- Consequences: Companies House rejects filings that involve unverified individuals, and acting as an unverified director or PSC can be a criminal offence with a financial penalty.
Because verification is now a gate on incorporation, factor it into your timeline. If you use a formation agent that is an ACSP, they can carry out the verification as part of the package.
5. Register for Corporation Tax (and PAYE / VAT if relevant)
You must tell HMRC your company is active and register for Corporation Tax within 3 months of starting to do business. HMRC treats "doing business" broadly - it includes buying, selling, advertising, renting a property or employing someone. When you incorporate online you are usually set up for Corporation Tax at the same time; if the company starts dormant, you register once it begins trading. Register in your business tax account using your UTR. Registering late may trigger a penalty.
- PAYE: if the company pays you or anyone else a salary, register as an employer and run PAYE. See optimum director salary 2026/27 to set a tax-efficient salary and dividend split.
- VAT: register once your taxable turnover crosses the VAT registration threshold (or voluntarily before then if it suits you).
- Making Tax Digital: MTD applies to VAT now, and MTD for Income Tax is being phased in for the self-employed and landlords - see our MTD for Income Tax software guide 2026/27.
6. Formation agent vs DIY
You can register directly with Companies House for the flat £100 online fee, or use a formation agent. Agents file the incorporation for you and usually bundle extras - the choice comes down to whether you want those extras in one place.
| Route | Typically includes | Best when |
|---|---|---|
| DIY (Companies House online) | Just the incorporation, for the £100 fee. | You only need the company itself and are happy to handle identity verification, registered office and tax registration yourself. |
| Formation agent | Incorporation plus, in various packages, a registered office or service address, a business bank account introduction, accounting or bookkeeping software, and identity verification as an ACSP. | You want the bundle in one place, or want the agent to run your identity verification. Compare what each package actually includes against the standalone fee. |
We do not recommend a specific agent. Agent packages cost more than the bare Companies House fee and some bundle recurring subscriptions, so weigh the extras against what you actually need.
7. What you must do after formation
Incorporation is the start, not the end. A limited company carries recurring filing duties whether or not it trades.
| Obligation | Deadline | To whom |
|---|---|---|
| Annual accounts | 9 months after year end (21 months for first accounts) | Companies House |
| Confirmation statement | At least every 12 months (£50 online) | Companies House |
| Company Tax Return + Corporation Tax | Tax due 9 months + 1 day after period end; return filed later | HMRC |
| PAYE (if paying salary) | Report on or before each payday (RTI) | HMRC |
Missing a Companies House deadline triggers automatic late-filing penalties; missing an HMRC deadline triggers penalties and interest. Many small companies use an accountant to keep these filings on track - see our contractor and limited company accountant guide 2026/27.
Related calculators and guides
- Sole trader vs limited company - decide whether to incorporate at all.
- Optimum director salary 2026/27 - set a tax-efficient salary and dividend split once incorporated.
- Contractor and limited company accountant guide 2026/27 - who handles your accounts, CT return and payroll.
- MTD for Income Tax software guide 2026/27 - the digital filing changes.
- Closing a limited company (MVL) guide 2026/27 - the other end of the company lifecycle.
Frequently asked questions
How much does it cost to set up a limited company?
Registering a limited company online with Companies House costs £100 from 1 February 2026 (up from £50, which applied from May 2024), and the company is usually registered within 24 hours. Registering by post on form IN01 costs £124 and takes 8 to 10 days. You can also register through a formation agent or third-party software, whose combined package price varies. To register you need a company name, a UK registered office address, at least one director aged 16 or over, at least one shareholder, one or more SIC codes and details of your People with Significant Control.
How do I register a limited company?
You register directly with Companies House online, by post, or through a formation agent. The online route is the fastest and cheapest at £100 with the company usually incorporated within 24 hours. You supply a company name, a UK registered office address, at least one director, at least one shareholder (who can be the same person), one or more SIC codes describing what the company does, details of your People with Significant Control (PSC), and you agree to the memorandum and articles of association. Companies House then posts your Certificate of Incorporation and a 10-digit Unique Taxpayer Reference (UTR) to the registered office, usually within 14 days. From 18 November 2025 every new director and PSC must complete identity verification as part of the process.
What do I need to set up a limited company?
Six things. (1) A company name that ends in "Limited" or "Ltd" (or the Welsh "Cyfyngedig"/"Cyf"), is not the same as an existing name and does not use restricted or sensitive words without permission. (2) A registered office address in the UK, in the same country the company is registered in - this address is public. (3) At least one director aged 16 or over (Companies Act 2006 s.157); a company secretary is optional. (4) At least one shareholder or guarantor, who can also be a director. (5) One or more SIC codes identifying the company's activity. (6) Details of your People with Significant Control (PSC) - anyone who owns more than 25% of shares or voting rights, or otherwise controls the company. You also adopt a memorandum and articles of association (model articles are fine for most companies).
How long does it take to set up a limited company?
Registering online with Companies House is usually completed within 24 hours. Registering by post on form IN01 takes 8 to 10 days. Formation agents typically match the online 24-hour timescale because they file digitally. From 18 November 2025, identity verification for directors and People with Significant Control is a mandatory step, so allow time to verify your identity (online via GOV.UK One Login, at a Post Office, or through an authorised agent) before or during incorporation.
Do I need to register for Corporation Tax after forming a company?
Yes. You must tell HMRC that your company is active and register for Corporation Tax within 3 months of starting to do business. "Doing business" includes buying, selling, advertising, renting a property or employing someone. When you incorporate online you are usually set up for Corporation Tax at the same time; if your company is dormant to begin with, you register once it starts trading. You register in your business tax account using the 10-digit UTR that HMRC posts to your registered office within 14 days of incorporation. Registering late may trigger a penalty.
What is identity verification for company directors?
Under the Economic Crime and Corporate Transparency Act 2023 (ECCTA), identity verification became mandatory from 18 November 2025. Every new director and every new individual person with significant control must verify their identity when a company is incorporated or when they are appointed. You can verify directly with Companies House online using GOV.UK One Login, in person at a Post Office, or through an authorised corporate service provider (ACSP) such as an accountant or formation agent. Existing directors of companies formed before that date verify by their next confirmation statement during a 12-month transition. Companies House rejects filings for unverified individuals, and acting while unverified can be a criminal offence.
Should I set up a limited company or stay a sole trader?
It depends on profit level, risk and admin appetite. A limited company is a separate legal entity that gives limited liability and can be more tax-efficient once profits are higher, because you can take a mix of a small salary and dividends. A sole trader is simpler and cheaper to run with less public disclosure, but you are personally liable for business debts. There is no single crossover figure - it turns on your profits, how much you draw versus reinvest, and whether you value the liability protection. Read our dedicated sole trader versus limited company comparison, and once incorporated use our optimum director salary guide to set a tax-efficient salary and dividend split.
What are the ongoing duties after setting up a limited company?
Four main recurring obligations. (1) File annual accounts with Companies House - due 9 months after the company's financial year end (your first accounts are due 21 months after the date you registered). (2) File a confirmation statement at least once every 12 months to confirm your company details are up to date - the online fee is £50 from 1 February 2026. (3) File a Company Tax Return and pay Corporation Tax to HMRC - the tax is due 9 months and one day after the accounting period ends for most small companies, and the return is filed later. (4) Run PAYE if you pay yourself or staff a salary, and register for VAT if turnover crosses the threshold. Many small companies use an accountant to keep these on track.
Is it worth using a formation agent?
A formation agent files your incorporation with Companies House on your behalf and usually bundles extras such as a registered office or director's service address, a business bank account introduction, accounting or bookkeeping software, and identity verification as an authorised corporate service provider. It can save time if you want those services in one place, particularly the identity verification step now that it is mandatory. The trade-off is that agent packages cost more than the flat £100 Companies House online fee, and some bundle recurring subscriptions. Registering directly with Companies House is straightforward if you only need the incorporation itself. We do not recommend a specific agent - compare what each package actually includes against the standalone Companies House fee.