How to Set Up a Limited Company in London: Step-by-Step Guide

Starting a limited company in London can give your business a formal legal structure and separate the company’s finances from your personal finances. However, incorporation also brings ongoing responsibilities involving Companies House, HM Revenue & Customs (HMRC), accounting records and tax.

Whether you are starting a consultancy, retail business, property company, technology business or professional service, it is worth getting the structure and company records right from the beginning.

This step-by-step guide explains how to set up a limited company in London and what you should consider after incorporation.

1. Decide Whether a Limited Company Is the Right Structure

Before registering a company, consider whether operating through a private limited company is appropriate for the business.

A limited company is a separate legal entity from its owners. This means the company can enter contracts, own assets, employ staff and incur liabilities in its own name.

Common UK business structures include:

• Sole trader
• Private company limited by shares
• Private company limited by guarantee
• Partnership
• Limited liability partnership (LLP)

For many commercial businesses, a private company limited by shares is the structure considered when incorporating.

However, incorporation creates additional reporting, accounting and administrative responsibilities. The most suitable structure will depend on the circumstances of the business and its owners.

2. Choose Your Company Name

The next step is choosing a suitable company name.

Your proposed name must comply with Companies House rules and should not be the same as an existing registered company name. Certain words and expressions are restricted or require permission.

It is also sensible to consider whether:

• The matching domain name is available
• The name could conflict with an existing trade mark
• The name is suitable for future expansion
• Customers can easily spell and remember it

Do not assume that Companies House accepting a company name automatically gives you trade mark protection.

3. Choose a Registered Office Address

Every UK limited company needs a registered office address.

If your company is registered in England and Wales, its registered office must be an appropriate physical address in England and Wales.

The registered office is the company’s official address for correspondence from organisations such as Companies House and HMRC. Some company information is publicly available, so business owners should consider privacy when deciding which address to use.

For entrepreneurs setting up a limited company in London, the registered office does not necessarily need to be the location where day-to-day business activities take place.

4. Appoint at Least One Director

A private limited company must have at least one director.

Directors are legally responsible for running the company and ensuring that its statutory responsibilities are met. Hiring an accountant or other professional adviser does not remove the directors’ legal responsibilities.

Directors are responsible for matters including maintaining appropriate company records, ensuring accounts are prepared and making sure required information is submitted to Companies House and HMRC.

Companies House Identity Verification

Identity verification is now an important part of UK company administration.

From 18 November 2025, Companies House began introducing mandatory identity verification requirements for directors and people with significant control (PSCs).

If you are registering a new company, Companies House requires the personal code for each director as part of the incorporation filing. Existing companies and PSCs have requirements that depend on their circumstances and relevant compliance dates.

Make sure you check the current Companies House requirements when incorporating rather than relying on an older company formation guide.

5. Decide Who the Shareholders Will Be

A company limited by shares must have at least one shareholder. The shareholder can also be a director.

You need to decide:

• Who will own shares
• How many shares will be issued
• What classes of shares will exist, if relevant
• How ownership will be divided
• What rights attach to the shares

A straightforward owner-managed company may have a relatively simple share structure. Businesses involving several founders, investors or different shareholder rights may require more careful planning.

Changing the ownership structure later can have legal and tax consequences, so it is worth considering the initial structure carefully.

6. Identify People with Significant Control

You must identify the company’s people with significant control, commonly called PSCs.

A PSC can include someone who has more than 25% of the company’s shares or voting rights, has the right to appoint or remove a majority of directors, or otherwise exercises significant influence or control.

Companies House must be given the appropriate PSC information.

This requirement is particularly important where several shareholders, corporate shareholders or more complicated ownership arrangements are involved.

7. Prepare the Company’s Governing Documents

When forming a company, you will need appropriate constitutional documents.

These normally include the:

Memorandum of association – confirms the initial shareholders’ intention to form the company.

Articles of association – set out the rules governing how the company is operated.

Many straightforward private companies use standard model articles. More complex companies may require bespoke articles or additional shareholder arrangements.

8. Register the Company with Companies House

Once the required information has been prepared, you can apply to incorporate the business with Companies House.

You will generally need information including:

• Proposed company name
• Registered office
• Directors’ details
• Shareholder information
• Share structure
• PSC details
• Articles of association
• Required identity-verification information

As at August 2026, the Companies House fee for standard online incorporation is £100. Companies House states that online applications are normally processed within 24 hours, although complex applications can take longer.

Fees and procedures can change, so always check the current Companies House charges before applying.

Once the application is approved, Companies House issues a certificate of incorporation. This confirms that the company legally exists and includes its company number and incorporation date.

9. Deal with Corporation Tax

A limited company is responsible for Corporation Tax on its taxable profits.

Depending on the incorporation route and circumstances, HMRC will need the relevant information about the company and its business activities.

It is important to distinguish between incorporating a company and starting to trade. A company can exist without immediately becoming active.

If your company starts trading, make sure its Corporation Tax position and HMRC records are dealt with correctly.

For companies with taxable profits of up to £1.5 million, Corporation Tax is normally payable nine months and one day after the end of the accounting period. Different payment arrangements can apply to larger companies.

10. Consider PAYE and VAT Registration

Depending on what your company does, further registrations may be necessary.

PAYE

If the company employs people or pays directors in circumstances requiring PAYE, it may need to register as an employer with HMRC and operate payroll correctly.

VAT

VAT registration may become compulsory when the company’s taxable turnover exceeds the applicable VAT registration threshold.

Some businesses choose voluntary VAT registration before reaching the compulsory threshold, but whether that is appropriate depends on the business.

Always check the current VAT threshold and HMRC rules for the relevant tax year before making a decision.

11. Open a Business Bank Account

Because a limited company is legally separate from its shareholders and directors, keeping company finances separate from personal finances is important.

A dedicated business bank account makes it easier to:

• Track income and expenditure
• Reconcile transactions
• Maintain accounting records
• Prepare annual accounts
• Deal with tax liabilities
• Monitor cash flow

Banks may ask for your certificate of incorporation, company number, identification and information about the directors and shareholders.

12. Set Up Proper Accounting and Bookkeeping

Good bookkeeping should begin as soon as the business starts operating rather than being left until the first accounts are due.

Maintain records of matters such as:

• Sales invoices
• Supplier invoices
• Business expenses
• Bank transactions
• Payroll
• VAT records where applicable
• Assets purchased by the company
• Loans
• Money introduced or withdrawn by directors

Using a consistent bookkeeping system can make year-end accounts, tax returns and management reporting considerably easier.

Businesses looking for support with accounting and company administration can learn more about KNS Accountants, an ACCA-regulated firm of Chartered Certified Accountants in North London.

13. Understand Your Ongoing Companies House Responsibilities

Company formation is only the beginning.

A limited company will normally have continuing compliance requirements, including annual accounts and a confirmation statement. Changes to certain company information must also be reported to Companies House.

For example, Companies House generally needs to be informed of changes involving directors and company secretaries within the relevant reporting period.

Maintaining accurate statutory records is particularly important where shareholders, directors or PSCs change.

Professional company secretarial services in North london can help businesses manage routine Companies House filings and statutory administration, while directors remain responsible for ensuring that the company meets its legal obligations.

Common Mistakes When Setting Up a Limited Company

Registering a company is relatively straightforward, but errors made during incorporation can create unnecessary work later.

Common issues include choosing an unsuitable share structure, using an inappropriate registered office, entering incorrect director or PSC information, overlooking identity-verification requirements, mixing personal and company transactions, failing to maintain proper bookkeeping records and missing Companies House or HMRC deadlines.

For a business with multiple shareholders or a more complicated ownership structure, taking professional legal and accounting advice before incorporation can be particularly useful.

Does a London Company Need a London Registered Office?

Not necessarily.

A company incorporated in England and Wales needs an appropriate registered office in England and Wales, but it does not have to be located in London simply because the business trades or serves customers there.

However, businesses should make sure their registered office arrangements meet Companies House requirements and that official correspondence can be received and dealt with promptly.

How Long Does It Take to Set Up a Limited Company?

Companies House states that standard online incorporation applications are normally processed within 24 hours, although an application can take longer where additional checks or information are required.

The overall business setup process may take longer because opening a bank account, arranging bookkeeping, setting up payroll or completing other registrations are separate tasks.

What Happens After Your Company Is Registered?

Once incorporated, create a simple compliance calendar covering the company’s important filing and payment dates.

Pay particular attention to:

• Annual accounts
• Confirmation statements
• Corporation Tax
• Company Tax Returns
• PAYE obligations, where applicable
• VAT returns and payments, where applicable
• Changes to directors, shareholders and PSC information
• Companies House identity-verification requirements

Remember that the accounting and Corporation Tax periods do not always align neatly during a company’s first year. In some circumstances, a new company may need two Company Tax Returns for its first set of accounts.

Final Thoughts

Setting up a limited company in London involves more than choosing a name and completing a Companies House application. You also need to think about directors, shareholders, PSCs, identity verification, share structure, accounting records, Corporation Tax and ongoing statutory filings.

Getting these foundations organised from the start can make ongoing company administration much easier.