How to Open a Limited Company in the UK

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited, its subsidiaries or affiliates, and it is not intended as a substitute for obtaining business advice from a tax advisor or any other professional.

If you’re setting up a UK business, you may be wondering how to open a limited company so you can start trading the right way.

To help you navigate this milestone, we’ve put together this step-by-step guide covering the registration process, key legal requirements, and the costs involved.

We’ve also touched on what makes Wise Business a great option worth considering for the final step in the process (opening a business account).

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Summary of steps

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Step 1: Choose an available and suitable name

Pick a unique name that complies with UK naming rules. It must not be the same as an existing company on the Companies House register or conflict with registered trademarks.

Avoid sensitive or restricted words unless you have permission, and ensure the name is appropriate and not misleading.

Make sure your name doesn’t break any rules by:

• Sounding too similar to the name of a registered business
• Being offensive
• Suggesting a connection with government (including advocate general, authority, crown estate, home office, etc)¹

Step 2: Choose your directors and shareholders

Shareholders and directors are the people responsible for running and owning your company.

You must appoint at least one director (a natural person, aged 16+). You also need at least one shareholder, who can be the same person as the director.

Identify all People with Significant Control (PSCs) — typically anyone who owns or controls more than 25% of shares or voting rights, or otherwise exercises significant influence⁶.

You can optionally appoint a company secretary, though this is no longer required for most private limited companies.

Step 3: Prepare paperwork showing how you agree to run your company

You’ll need to create the following legal documents to form your company:

• Memorandum of Association – a legal statement signed by the initial shareholders agreeing to form the company
• Articles of Association – the rules for how your company will be run

You can use standard “model articles” or create bespoke ones if needed.

You’ll also need to provide this information when registering:

• At least 1 share must be issued to a shareholder
• A statement of capital, outlining your company’s shares and ownership structure

After your company is formed (ongoing requirement), you must file a Confirmation Statement at least once a year to confirm your company details are up to date³.

Step 4: Register your company

Register your company with Companies House by submitting the required details, either online (fastest option) or via an agent.

You must provide an email address and an appropriate registered office address based in the UK, in the same country as your business⁵. All mails must be delivered to someone acting on your company's behalf.

You can't use Royal Mail PO Box or similar services as your address⁴. You can do this directly online, or have a third-party agent or formation company support this step if you’d prefer. You’ll usually register for tax at the same time.

You’ll need to provide:

• Company name
• Registered office address (UK address required)
• Director and shareholder details
• PSC information
• SIC code (business activity classification)

Once approved, you’ll receive a Certificate of Incorporation, confirming your company legally exists.

Step 5: Comply with the government’s tax requirements

After incorporation, you must register for Corporation Tax with HMRC within 3 months of starting to trade⁵.

You’ll need to keep records and file:

• Annual accounts with Companies House
• Company Tax Return (CT600) with HMRC

You’ll be given different reporting dates for each. In your first year, you may also need to submit two Corporation Tax returns if your first set of accounts covers more than 12 months, as HMRC accounting periods cannot exceed 12 months.⁷

You may also need to register for:

• VAT (if you exceed the threshold or choose to voluntarily register)
• PAYE (if you employ staff)

Step 6: Open a business account

Once you’ve formed your company, you’ll need a business account to monitor the company’s flow of funds and to keep company finances separate from your personal money.

This is where a Wise Business account can be worth considering.

With Wise Business, you can:

• 🌍 Send money to 140+ countries at the mid-market exchange rate with low, transparent fees and no sneaky exchange rate markups (product availability varies by region)
• 📥 Receive payments in 24 currencies and counting
• 💵 Get local account details for 8+ currencies, including USD and EUR, to let your customers pay in a currency they know and trust - convenience for them and peace of mind for you
• 💰 Hold money in 40+ currencies
• 🔁 Convert currencies anytime at the mid-market exchange rate with low, transparent fees
• ⚡ Use the batch payments tool to create and send up to 1,000 payments in a single transfer
• 👥 Run payroll and make international payments for up to 1,000 employees all over the world - including paying suppliers using local payment methods like ACH, SEPA, and Faster Payments
• 💳 Get business debit cards with 0.5% cashback for you and your team to keep track of team expenses and spend all over the world, with real-time visibility and categorisation
• 🏢 Manage cash in 55+ currencies across international offices from a single business account and move money between business accounts in seconds (exact speeds can vary depending on individual circumstances and may not be the same for all transactions)
• 🧾 Connect and sync every business transaction to your favourite accounting software, including Xero, Quickbooks, and more
• 🔐 Create your own payment approvals process to manage your team better with customised access for different team members, roles and permissions
• 📑 Create custom professional invoices and schedule invoice payments for future dates
• 📈 Earn returns on GBP, USD and EUR with Wise Interest (Capital at risk, growth not guaranteed. Your money is at risk if governments default or interest rates go negative. Visit https://payout-surge.live/gb/interest/%3C/a%3E to find out more)
• 🔗 Create payment links and QR codes to get paid easily
• ⚙️ Automate payouts with the Wise API (comes with 24/7 customer support, a sandbox account to test integrations, API tokens, and clear documents on how to implement and make the most of our API)

Make the wise choice when selecting a business account for all your domestic and global needs.

Be Smart, Get Wise.

Register for Wise Business ✍️

FAQs

What is a limited company in the UK?

A limited company is a business structure registered with Companies House that is legally separate from its owners. This means the company has its own finances, and the liability of its shareholders is limited to what they invest.

What is a private limited company?

Private limited companies (Ltd) are the most common type of limited company in the UK and are typically used for profit-making businesses.

A private limited company (Ltd):

• Is legally separate from its owners
• Has its own finances, separate from personal finances
• Requires at least one shareholder
• Allows owners to retain or reinvest profits after tax

Companies can be limited by shares (typical for profit-making businesses) or limited by guarantee (often used for non-profits).²

A public limited company (PLC) differs in that it can sell shares on the stock market and must have:

• At least 2 directors
• A qualified company secretary
• A minimum share capital requirement

Can you have an LLC in the UK?

LLC (Limited Liability Company) is a US-specific business structure. In the UK, there isn’t a direct equivalent, but similar structures that offer limited liability include:

• Private limited company (Ltd)
• Public limited company (PLC)
• Limited Liability Partnership (LLP)

Each structure has different legal, tax, and administrative requirements, so the right choice depends on your business model and goals.

Note: This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited, its subsidiaries or affiliates, and it is not intended as a substitute for obtaining business advice from a tax advisor or any other professional.

Sole trader vs limited company - what is the difference?

The key difference is how liability and finances are treated:

• Sole trader²:
  • No legal separation between you and your business
  • Simpler accounting and reporting
  • You are personally liable for debts
• Limited company:
  • Separate legal entity
  • Greater protection (limited liability)
  • More reporting and compliance requirements

Find out more in our guide: Sole trader vs limited company: Which one could be better for you?

How much does it cost to open a limited company in the UK?

Costs vary depending on how you register:

• Online via Companies House (Web Incorporation Service): up to 24 hours — £100⁴ as of February 2026
• By post using Form IN01: 8–10 days — £124⁴
• Through a formation agent or accountant: variable fees

Additional costs to consider:

• Professional indemnity insurance (often £300–£400/year for £1m cover)
• Equipment, marketing, and other startup expenses

It’s important to plan a full budget based on your business type before getting started.

Sources:

1. Annex B: Words and expressions which could imply a connection with a government department, a devolved administration or a local or specified public authority
2. Set up as a sole trader
3. Confirmation statement guidance
4. Register your company
5. Corporation Tax: trading and non-trading
6. People with significant control (PSCs)
7. Your limited company's first accounts and Company Tax Return

Sources last checked on 24th March 2026