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Limited companies: How much does it cost to set one up?

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Limited companies: How much does it cost to set one up?
Setting up a limited company is surprisingly easy, compared to the effort involved in starting your own business. Depending on which route you choose, you may be able to register a limited company within 24 hours and for less than your average takeaway.
There are three ways to set up a limited company by either:
Each one has different lead times and fees. This article will look at your options so you can find the right one for you.

How much does it cost to register a company if I do it myself?

Companies House has made it easy to register your limited company, either online or by post.
For private limited companies, you can register your business online for £12 if it:
  • Has everything needed for its setup.
  • Will be limited by shares.
  • Will use standard articles of association.
You’ll need to fill in form IN01, which asks for director and shareholder details and your registered address.
After paying the registration fee by debit or credit card, your company will be registered within 24 hours.
For public or private limited companies, you can register by post, which costs £40 and has an 8-10-day turnaround. You’ll need to pay by cheque, made out to Companies House.
Image of a lady working on a laptop with notes

What do I need to set up a limited company?

There are many things you’ll need when setting up your limited company.
 A company name
If you’re planning on setting up a private limited company, you’ll need a registered name.
There are a couple of rules you’ll need to consider.
For example, your name can’t be the same (or very similar) to one already registered, it can’t be offensive, and it should usually include the word ‘limited.’
There are some instances where you don’t have to include ‘limited,’ such as if your articles of association say your company can’t pay its shareholders. You can find out more details here.
If you want to trade under a name different from your registered company name, your business name must not include ‘limited.’
Decide to change your registration name? Companies House charges £8 to make the change online, or £10 by post.
 A memorandum of association
You’ll need a memorandum of association if you’re registering by post. It will be created automatically if you register online.
A memorandum of association is a legal statement signed by initial shareholders or guarantors, confirming they agree to form the company and includes your company name, location and business type.
There are online templates you can use. For the business type, you should select a standard industrial classification (SIC) code from the list provided by Companies House.
You can’t update the memorandum once the company has been registered.
 A completed IN01 form
The IN01 form, which you can complete online or on paper, will ask for details, including three pieces of information about yourself, your shareholders and directors.
This can include:
  • Town of birth
  • Telephone number
  • National insurance number
  • Passport number
  • Address or registered limited company address
If you don’t have a company address yet, you can instead use a personal address as HMRC and Companies House need a place to send legal correspondence.
You’ll need to confirm your limited company complies with the terms and conditions of the Companies Act.
Articles of association
This is a legal document that outlines the rights and powers of company shareholders and directors.
You can use standard articles (also known as model articles), which is a default set of articles established by the Companies Act 2006, or you can write your own with the help of a legal adviser.

How much does it cost to set up a company with an accountant?

If this is your first time setting up a company, having an accountant can boost your confidence. They’ll help you complete the paperwork and also advise you on the next steps.
Once you’re registered with Companies House, you’ll have many statutory obligations.
Your accountant can help you understand these, and ensure you submit all financial accounts accurately and on time to remain compliant.
An accountant may set up your limited company for free. If not, there will be a one-off fee, which can vary depending on the extent of their involvement.
If you’re looking for an accountant, here’s the general cost of an accountant.

What happens after my limited company is registered?

Once your company is successfully registered, you’ll receive a certificate of incorporation, which proves your company legally exists and shows your company name and date of formation.
If you register online, you’ll most likely be registered for corporation tax at the same time.
If you registered by post or through a third-party agent or software, you’ll need to register for corporation tax separately within three months of starting your business.

Are there other costs associated with running a limited company?

With the initial registration done, the next thing you need to remember is your annual confirmation statement.
You need to file this every year to confirm your details at Companies House are up to date. It costs £13 to file online and £40 by post.
Other costs associated with running a limited company include rent, utilities, wages, digital marketing, accountant fees and insurance. How much these cost depends on you and your business.
If you ever need to re-register your company, you can do this by post for a £20 fee.
Your accountant can help you keep on top of all the costs of running a limited company.

Need help with your financial accounts?

Unbiased can quickly connect you with a qualified accountant who can help you with your accounts by making sure they are accurate and filed on time.
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