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Chris Bell

10 Easy Steps in Setting Up a Limited Company

When setting up a new business one of the first decisions is whether to set up as a sole trader or as a limited company and there are advantages and disadvantages to both options.

However, if you decide to go down the limited company route there are a number of things you need to do to make that work legally – there is a lot more administration required compared with setting up as a sole trader so it’s important to follow all the guidance.

Because of their experience with working with limited companies, we asked our friends from Crunch, who specialize in accounting for limited companies, and they gave these 10 steps you need to take to set up your own limited company:

  1. Decide on your unique company name

Companies House keeps a register of all company names and your name must be unique so you need to spend some time researching your business name and making sure it is actually one that’s available for you to use. There are various tools and services you can use to check whether the name you have in mind is already being used by another firm.

  1. Decide on your registered address

You need to have a registered address for your business, where all official correspondence can be sent. If you have an office space then use this, or if your accountant is setting up the process for you, most accountants will allow you to use their address for this. This address will appear in all your company files going forward.

  1. Decide on Company Directors

You need to decide who your company directors are going to be and whether you are going to have any other people in the company such as a company secretary. The details of all company directors will need to be declared to Companies House when setting up a new business.

  1. Company shares

The next step is to decide on company shares and who owns them. It might be that you own them all yourself, or you share the business with your partner. This needs to be decided at the start and it can help to work with an accountant on this aspect of setting up your limited company.

  1. Shareholder details

Once you have agreed on the share split, you need to make sure you have all the personal details of all shareholders to be included in your submission for limited company status.

  1. Set up your Articles of Association

Limited companies require a set of Articles of Association which outline how the business will be run, covering voting powers, shareholder rights, dividend distribution etc… and should be set up with your solicitor to ensure everything is covered legally. There are templates and models available of what these should look like and what should be included.

  1. Set up your business Memorandum of Association

Again, you can find templates for what this document should look like online, however, it is essentially a Memorandum outlining that all of the people mentioned in the set-up of the company, have agreed to form a limited company together.

  1. Submit your application to Companies House

The only way to set up a limited company is by submitting a request to Companies House – you can do this online or by paper application and as a business you can ask your accountant to manage this process for you, or you can do it yourself.

  1. Pay the Companies House fees

You will need to pay fees to set up a new company, both to Companies House and potentially to your accountant to set it all up for you as well, however the fees to Companies House are quite small.

  1. Register for Corporation Tax

Once you have set up your limited company you need to register for Corporation Tax and VAT within three months of starting to do business. It’s important to get all of your accounting and tax processes in place and again, this is an area your accountant can help you with if need be.


Setting up a limited company can take some time and administration, and certainly is more complex than deciding to operate as a sole trader. However, by following these ten simple steps you will have all of the documentation and information required to successfully establish your limited company.

Of course there will be a lot of other considerations for example, HR, payroll, staff, offices, manufacturing, marketing and the actual running of the business on a day-to-day basis, however, all of these can be established once your limited company has been set up and you know that your unique company name is now registered and protected.

Having a limited company offers a strong degree of separation between you as the business owner, and the business itself, so if there were any financial issues or problems with the business, your personal responsibility is lessened, when compared with working as a sole trader.