Starting your own company is an exciting step, and incorporating your business is a key milestone. Incorporation gives your business its own legal identity, separating it from you, the owner. Whether you’re just starting or ready to level up your business, here’s everything you need to know about incorporating in the UK - broken down into clear, easy steps.
What does incorporating a company mean?
Incorporating your business means turning it into a separate legal entity by registering with Companies House. Once incorporated, your company can:
Own property, sign contracts, and hire employees in its own name.
Protect your personal finances through limited liability, so you’re only responsible for company debts up to the value of your shares.
While incorporation offers many benefits, it also comes with legal responsibilities, like filing annual reports and tax returns.
How do you incorporate a company in the UK?
Follow these steps to get your business legally registered:
1. Choose your company structure
Most businesses register as a private limited company (Ltd), but you might also consider:
Public limited company (PLC): For larger businesses looking to sell shares to the public.
Limited liability partnership (LLP): Combines the flexibility of a partnership with the limited liability of a company.
Your choice will impact your taxes, how you raise money, and your business’s legal obligations.
2. Select a unique company name
Your company name must follow Companies House regulations. It cannot be identical or too like an existing company name.
3. Decide on your registered office address
This is the official address for your company, where government documents like tax letters will be sent. It must:
Be a physical UK address (not a PO box).
Be in the same country where your company is registered (e.g. England, Scotland, Wales, or Northern Ireland).
4. Appoint at least one director
Every company needs at least one director to oversee operations. Directors must:
Be 16 or older.
Not be disqualified from serving as a company director.
5. Define your share structure
Private limited companies need to decide how to issue shares. You’ll decide how many shares to issue, their value, and how ownership will be divided among shareholders. This structure impacts decision-making and how you distribute profits.
6. Prepare key documents
Memorandum of Association: Shareholders confirm they want to form the company by signing a memorandum and articles of association.
Articles of Association: These are a set of rules that govern how the company operates.
💡Editor's insight: “You might not know, but there are model articles provided by Companies House. These can help you create articles of association that work for your own business model. You can also create custom ones for your business.”
7. Complete the incorporation application
Submit your application through the Companies House website. The fee for standard online incorporation is typically £12. Once processed, you’ll receive a Certificate of Incorporation.
8. Register for taxes
Once incorporated, you’ll need to:
Register for Corporation Tax with HMRC within three months of trading.
Consider VAT registration if your turnover exceeds £90,000 (or register voluntarily if it benefits your business).
What documents do you need to incorporate a business?
To successfully incorporate a company, you’ll need to provide the following key documents:
Memorandum of Association: A legal statement signed by all initial shareholders. This will help you to form the company.
Articles of Association: A document that outlines how the company will be run. This will detail the responsibilities of directors and shareholders.
Incorporation form (IN01): This includes the company name, address, director details, and shares.
These documents ensure your company complies with the Companies Act 2006.
Pros and cons of incorporating
Advantages ✅ | Disadvantages ❌ |
|---|---|
Incorporation separates personal and business assets, reducing personal financial risk. | Annual filings, tax returns, and company accounts are mandatory. |
A registered company can often appear more trustworthy and established. | Key details, such as company directors and finances, are publicly available. |
Companies can benefit from lower corporate tax rates compared to personal income tax for sole traders. | Incorporation involves initial registration fees and accountancy costs. |
Incorporated businesses can be more attractive to investors and banks. |
What happens after incorporation?
Once your company is incorporated, you will:
Receive a Certificate of Incorporation: This official document will confirm your company’s status.
Be assigned a Company Registration Number (CRN): Your CRN is a unique identifier for your business.
Register for taxes: Depending on your turnover, you may need to register for VAT. Corporation tax registration is essential.
Maintain statutory records: Keep up-to-date records of directors, shareholders, and company meetings.
💡Editor's insight: "You’ll also need to comply with annual filing obligations. You will have to submit a confirmation statement every year. This confirms that the details about the company still stand. You will also need to submit accounts to Companies House every year.”
FAQs
What does it mean if a company is incorporated in the UK?
If a company is incorporated in the UK, it is a legally recognised entity. This status provides limited liability protection for its owners, protecting their personal assets. They are also required to follow corporate rules.
Final thoughts
Incorporating a business in the UK can bring many benefits, from financial protection to credibility. It does come with ongoing legal responsibilities. By understanding the process, you can prepare the right documents, and stay compliant. You can set your business on the path to long-term success.
Looking for legal advice? Get in touch today for a free quote and to see how our small business lawyers can help your business.
References
Set up and run a limited liability partnership (LLP) by Gov.UK
Companies Act 2006 by legislation.gov.uk.
Disclaimer: This article only provides general information and does not constitute professional advice. For any specific questions, consult a qualified accountant. Bear in mind that tax rules can change and will differ based on your circumstances.