How to Set Up a Limited Company in London: Step-by-Step Guide
How to Set Up a Limited Company in London: Step-by-Step Guide (2026)
Starting a business in London is an exciting opportunity, but choosing the right business structure is an important first decision. If you are planning to establish a limited company, understanding the registration process, legal requirements and ongoing accounting responsibilities can help you get started.
To set up a limited company in London, you need to choose a company name, appoint at least one director and shareholder, provide a registered office address, prepare incorporation details and register with Companies House. You must also consider Corporation Tax, bookkeeping, VAT and annual filing obligations.
This step-by-step guide explains how to register a limited company in London, what it costs in 2026 and how professional accountants can support your new business.
What Is a Limited Company?
A limited company is a business structure legally separate from its owners. It can enter into contracts, own assets, employ staff and carry out business activities in its own name.
Most small businesses that incorporate choose a private company limited by shares.
The main characteristics include:
- Separate legal identity: The company exists independently of its directors and shareholders.
- Limited liability: Shareholders’ financial liability is generally limited to any unpaid amount on their shares, although exceptions apply.
- Corporation Tax: The company pays tax on its taxable profits.
- Annual reporting: The company must meet Companies House and HMRC filing requirements.
- Ownership: A company can have one or several shareholders.
Before registering, consider whether operating as a limited company is suitable for your business.
Step 1: Decide Whether a Limited Company Is Right for You
The first step is comparing the available business structures.
Two common choices for people starting a business in London are operating as a sole trader or forming a limited company.
Sole Trader vs Limited Company
| Feature | Sole Trader | Limited Company |
|---|---|---|
| Legal structure | Individual and business are legally the same | Separate legal entity |
| Registration | Generally register with HMRC when required | Register with Companies House |
| Liability | Generally unlimited personal liability | Generally limited shareholder liability |
| Tax | Income Tax on taxable business profits | Corporation Tax on company profits; personal tax may also apply |
| Annual accounts | No Companies House accounts | Companies House accounts required |
| Administration | Generally simpler | More reporting and record-keeping responsibilities |
A limited company may suit businesses seeking a separate legal identity, a share-based ownership structure or opportunities to bring in investors.
However, incorporation also creates additional administrative and reporting responsibilities.
Step 2: Choose a Suitable Limited Company Name
Your company name must comply with Companies House rules.
Before registering your business, make sure the name:
- Is not identical to an existing registered company name.
- Does not breach restrictions on sensitive or offensive words.
- Normally ends with “Limited” or “Ltd”.
- Does not infringe another business’s trade mark.
You can check name availability using the Companies House online service.
It is also sensible to check domain name availability if you plan to establish a business website.
Step 3: Appoint Your Company Directors and Shareholders
A private limited company must have at least one director and at least one shareholder.
Company Directors
Directors are responsible for managing the company and meeting its legal obligations.
Their duties include maintaining appropriate records, overseeing financial reporting and ensuring required information is filed.
Company Shareholders
Shareholders own shares in the company. A single person can act as both director and shareholder.
You must also identify people with significant control (PSCs). For example, someone holding more than 25% of the company’s shares or voting rights will generally be a PSC.
Identity Verification
Companies House identity verification requirements began taking effect from 18 November 2025.
Directors and PSCs must comply with the applicable verification requirements and deadlines. Individuals may receive a personal code to use when registering or updating company information.
Step 4: Choose Your Registered Office Address in London
Every limited company must have a registered office address in the UK jurisdiction where it is incorporated.
For a company registered in England and Wales, the registered office must be an appropriate address in England or Wales.
You can use an eligible London business address, but you do not have to choose a London registered office simply because you trade in London.
Your registered office address appears on the public Companies House register.
You must also provide a registered email address, which is not published on the public register.
If you are starting a business in North London, consider how your chosen address will support official correspondence and record management.
Step 5: Prepare Your Company Formation Documents
Before submitting your application, you need to prepare the required incorporation information and documents.
These commonly include:
Memorandum of Association: A legal statement confirming that the initial subscribers wish to form the company.
Articles of Association: The rules governing how the company operates and makes decisions.
Statement of Capital: Details of the company’s share structure, including the shares issued and their nominal value.
You must also select a Standard Industrial Classification (SIC) code describing the company’s business activities.
Accurate information at this stage can help avoid registration delays and future administrative corrections.
Step 6: Register Your Limited Company With Companies House
Once your details are ready, you can submit your application through Companies House.
How Much Does It Cost to Register a Limited Company in 2026?
As of 21 October 2026, the published Companies House fees are:
| Registration method | Government fee |
|---|---|
| Online incorporation | £100 |
| Paper incorporation | £124 |
| Same-day incorporation through eligible software | £156 |
These are government registration fees, not accountant or company formation agent fees.
Online applications are usually processed within 24 hours, although registration times are not guaranteed.
Once your company has been successfully registered, Companies House issues a certificate of incorporation confirming the company number and incorporation date.
Step 7: Set Up Corporation Tax Arrangements
After incorporating your company, you need to make sure its Corporation Tax affairs are correctly established.
Companies registered through the online service are usually set up for Corporation Tax at the same time, unless they are dormant.
When HMRC issues your company’s Unique Taxpayer Reference (UTR), you should check that the appropriate Corporation Tax services are available in your business tax account.
If your company becomes active and has not been correctly registered for Corporation Tax, you generally need to notify HMRC within three months of starting business activity.
Important Corporation Tax Deadlines
For a typical company:
- Corporation Tax payment is generally due nine months and one day after the end of its accounting period.
- The Company Tax Return is generally due 12 months after the end of the accounting period.
Different rules may apply in certain circumstances.
Professional accounting services in London can help businesses maintain records and prepare for their tax and reporting responsibilities.
Step 8: Open a Business Bank Account
A limited company is a separate legal entity, so maintaining a dedicated business bank account is an important practical step.
A separate account helps you:
- Keep business and personal transactions distinct.
- Monitor income and expenditure.
- Manage payments to suppliers.
- Maintain clear financial records.
- Prepare information for your accountant.
Banks may request your certificate of incorporation, company registration number, identification documents and details of the company’s directors or beneficial owners.
Requirements vary between banking providers.
Step 9: Set Up Bookkeeping and Accounting Records
Once your limited company starts trading, maintaining accurate financial records becomes essential.
Companies must keep appropriate accounting records showing their transactions, assets and liabilities.
These records support the preparation of annual accounts, tax calculations and financial reports.
What Records Should a Limited Company Keep?
Common records include:
- Sales invoices and receipts.
- Purchase invoices and expenses.
- Bank statements.
- Payroll records.
- VAT records, where applicable.
- Details of company assets and liabilities.
- Director loan transactions.
- Shareholder and dividend documentation.
Most limited companies must retain accounting records for at least six years from the end of the relevant financial year, although exceptions can require longer retention.
Using professional bookkeeping services in London can help maintain organised records and support accurate financial reporting.
Step 10: Check Whether You Need VAT and PAYE Registration
Not every new limited company needs to register for VAT immediately.
VAT Registration
As of October 2026, the UK VAT registration threshold is £90,000 of taxable turnover.
Businesses generally must register if taxable turnover exceeds £90,000 over a rolling 12-month period or is expected to exceed that amount in the next 30 days alone.
Other circumstances can also trigger registration requirements.
Some businesses register voluntarily even when their taxable turnover is below the threshold.
PAYE Registration
If your company employs staff or pays directors in circumstances requiring PAYE, you may need to register as an employer with HMRC.
Payroll obligations can include:
- Calculating salaries.
- Operating PAYE where required.
- Managing National Insurance contributions.
- Reporting payroll information to HMRC.
- Maintaining employee payroll records.
Step 11: Understand Your Annual Filing Responsibilities
Registering a limited company is only the beginning.
Company directors must ensure that ongoing reporting obligations are met.
Common Limited Company Filing Requirements
| Requirement | Typical deadline |
|---|---|
| First annual accounts | 21 months after incorporation |
| Subsequent annual accounts | 9 months after the financial year-end |
| Confirmation statement | At least once every 12 months, filed within the applicable 14-day period |
| Corporation Tax payment | Usually 9 months and 1 day after the accounting period ends |
| Company Tax Return | Usually 12 months after the accounting period ends |
| VAT returns | According to the company’s VAT reporting obligations |
Deadlines can differ depending on the company’s circumstances.
Failing to submit required documents on time may result in penalties or other consequences.
An accountant can help explain the filing calendar and what information your company needs to maintain.
Common Mistakes to Avoid When Setting Up a Limited Company
New business owners sometimes focus entirely on registration and overlook what happens afterwards.
Common mistakes include:
1. Choosing the wrong business structure: Incorporation is not automatically the best option for every business.
2. Using an unsuitable registered office address: Companies House has specific requirements for acceptable addresses.
3. Providing incorrect shareholder information: Share ownership should reflect the intended ownership arrangement.
4. Mixing personal and company finances: This can make bookkeeping and financial reporting more complicated.
5. Ignoring Corporation Tax obligations: Company registration does not remove the need to manage tax responsibilities.
6. Missing filing deadlines: Annual accounts, confirmation statements and tax returns may have different deadlines.
7. Failing to maintain bookkeeping records: Incomplete records can create difficulties when preparing accounts and tax returns.
Do You Need an Accountant to Set Up a Limited Company in London?
You do not legally need to appoint an accountant simply to register a limited company.
However, professional accounting support can be useful when deciding how to structure the company, preparing financial records and understanding ongoing tax obligations.
An accountant may assist with:
- Company formation and accounting requirements.
- Corporation Tax registration and reporting.
- Annual accounts preparation.
- Bookkeeping and financial records.
- VAT and payroll obligations.
- General business accounting support.
If you are comparing providers, read our guide on how to choose an accountant in London before making your decision.
Why Choose KNS Accountants for Your London Business?
KNS Accountants is an ACCA-regulated firm of Chartered Certified Accountants based in North London.
The firm provides accountancy and related business services, including accounting, bookkeeping, taxation and company secretarial support.
Whether you are starting a limited company or managing an established business, understanding your accounting obligations is an important part of responsible financial management.
KNS Accountants is based in Golders Green and works with businesses across North London, including Finchley, Hendon, Hampstead, Temple Fortune and surrounding areas.
Frequently Asked Questions About Setting Up a Limited Company in London
1. How do I set up a limited company in London?
Choose a company name, appoint directors and shareholders, identify people with significant control, provide a registered office address and submit your incorporation application to Companies House. You must then manage the company’s tax, accounting and filing responsibilities.
2. How much does it cost to set up a limited company in London?
As of October 2026, standard online incorporation with Companies House costs £100. Additional professional or administrative fees may apply if you use an accountant or formation agent.
3. How long does it take to register a limited company?
Companies House usually registers online applications within 24 hours. Processing can take longer if additional checks or information are required.
4. Can one person start a limited company in the UK?
Yes. A private limited company can have one director and one shareholder, and the same person can hold both roles.
5. Do I need an accountant for my limited company?
There is no general legal requirement to appoint an accountant. However, directors remain responsible for meeting accounting, tax and filing obligations, whether they manage these themselves or obtain professional assistance.
6. Can I register a limited company using my home address?
You can use a suitable home address if it meets Companies House requirements. However, your registered office address will be publicly available, so consider the privacy implications.
7. Do I need to register for VAT immediately?
Not necessarily. VAT registration depends on your taxable turnover and other relevant circumstances. The standard UK VAT registration threshold is £90,000 as of October 2026.
8. Can I change from sole trader to limited company?
Yes. You can establish a limited company and transfer business activities where appropriate. However, transferring assets, contracts and business operations may have legal and tax implications.
9. What is the difference between a director and a shareholder?
A director is responsible for managing the company, while a shareholder owns shares in it. One person can be both.
10. Does a limited company have to submit annual accounts?
Yes. Limited companies generally must prepare and file annual accounts with Companies House, subject to the applicable reporting rules and exemptions.
11. Can I register a limited company without an office in London?
Yes. You do not need to rent a physical London office to establish a company. You must provide an appropriate registered office address within the relevant UK jurisdiction.
12. Is a limited company better than being a sole trader?
Neither structure is automatically better. The right choice depends on factors such as liability, administrative responsibilities, business plans and tax circumstances.
Final Thoughts: Starting a Limited Company in London
Setting up a limited company in London involves more than completing a Companies House application.
From choosing the right structure and appointing directors to maintaining accounting records and meeting HMRC deadlines, each step plays a role in establishing a properly managed business.
Understanding these requirements from the beginning can help you make informed decisions and prepare for the responsibilities of running a limited company.
Need accounting support for your new limited company? Visit KNS Accountants to explore the firm’s services for businesses in North London.
Last reviewed: 21 October 2026. This article provides general information, not personalised legal, financial or tax advice. Government fees, thresholds and filing requirements may change.
