When looking to start a business the question of how much to set up a limited company is often one of the most common. The good news is that It's never been easier to open a ltd company in the UK and as you'd expect in 2024 this can be done online in a matter of minutes meaning many people can go from business idea to registered company to starting their business in days.

The legal process of setting up your limited company is relatively simple, fast and affordable and you'll find out everything you need below.

Cost of setting up a limited company

The cost of opening a limited company in the UK is currently £12 which covers the company filing fee that you can pay directly to Companies House, however if you’re looking to save this fee you can actually get this fee paid for you if you open a Tide Business account as they will cover this fee for you and help you with the set up in the process (plus if you use our referral code: FOUNDERPASS you'll get £50 sign up bonus when you open an account and deposit £50 in the first 3 months).

If you’re not one for technology and prefer to open a limited company by post then you can do this but it does incur a higher fee of £40, you can find more details of this on the government website.

The final option is to open a limited company by using an approved formation agent, the cost of this varies but most will charge around £10 onwards. These companies help guide you through the process and charge a small fee for doing so.

If you’re thinking of opening a limited company account but want a little guidance then using a formation agent can help but we do recommend looking into Tide’s offering where you can open a limited company via them when you open a free business account, they cover the £12 ltd company formation fee and they also will deposit £50 into your account as a sign up bonus if you deposit £50 or more within the first 3 months.

What do I need to set up my limited company?

You do not need much to set up a limited company and most of what you do need will be supplied to you when registering but you will need the following:

1. Your company name

This is the name you’ll be registered under for example Smith Plumbing Services Ltd, there are some rules you’ll need to abide by for this and these include that it needs to be a unique company name and can’t be the same as one that currently exists, it also can’t have certain special characters in it and it cannot be an offensive name.

Don’t worry if you want to change your company name in the future as this can be done for a small fee of £8 if done online or £10 if done via post.

2. A Memorandum of Association

This document is created online automatically, so no need to worry too much about this as long as you’re happy with the standard one. This document is a legal statement that is signed by the company shareholders that essentially says you all agree to start the company.

3. A completed IN01 form

This form can be completed online and it simply asks for information about your company, the shareholders, directors and yourself. This typically will include things such as your company address, names, date of births etc.

4. Articles of Association

The majority of people will opt to use the standard articles of association that companies house supply, this document is a legal one that has a set of rules which state the powers of the shareholders and directors of the company and their rights. 

You can write your own however if you do this you should get help from someone who has experience of doing this first.

How long does it take to set up a limited company

The simple answer is that it takes minutes to actually submit everything to set up your limited company, however the full process can take a little longer for it to approved by Companies House, in generally in most cases you'll have your comnpany set up in under 24 hours and most people experience this in under 8 hours if done during business/working hours.

If you opt to submit everything via post then this process is much longer in comparison taking 8-10 working days. Not many people opt to do it this way as it's much easier to do it online nowadays however the option is still their for you to do it this way if you so wish.

Optional additional fees

The fee’s mentioned above are all that you need to open a limited company account, there is no need to pay anything else so if you use an agent to open a ltd company and they highly recommend something just make sure you actually need what they are offering.

Some companies offer additional services such as printing of your certificate of incorporation and share certificates on high quality paper, these are rarely needed in today's world where companies can be checked online in seconds.

You may want to look into paying for a registered address for your company if you do not have one already, often accountants will allow you to use their address for this but if you don’t have this then there are companies which offer their address as a way for you receive business documents and display it on your website etc.

What happens next after you start a limited company?

As soon as your business is registered then you can start trading under the limited company name. You may then want to update anywhere that may require your company name for example with suppliers, on invoices, on your website and so forth. 

Remember that as a limited company you’ll need to make sure you file accounts and other processes that you will legally be obliged to do. 

As a director you’ll need to make sure you follow and adhere to the responsibilities you now have which include:

• Make sure you follow all the rules for your company as stated in articles of association
• Keep all of your company records up to date
• Report any changes to your company records
• File your accounts as well as your company tax returns
• Pay corporation tax

Your company will be able to be found and certain information on it then found online via the companies house search , this will include things such as the names of the directors, filed accounts, company address, number and more.

Should I start a limited company?

It may seem a little daunting at first to open a limited company but it isn’t, we always recommend having an accountant when you open a limited company as they can often save you the money they cost by ensuring you file everything correctly as well as give tax saving tips.

There are many advantages to opening a limited company with one of the main ones being opening up opportunities that are only available to limited companies. Many suppliers will only deal with other limited companies rather than individuals, some banks will allow you to open business accounts if you have a limited company and you’ll gain from limited liability when you open a limited company. 

It can also be more tax efficient to open a limited company and pay yourself than by simply being self employed, however it is always best to get advice from an accountant when it comes to tax and financial planning.

The only person who can really answer the question of if it is right to open one is you, so make sure you read all of the information relating to opening limited companies and make an informed decision that is right for your circumstances.

Opening a limited company in 2024 summary

The cost of opening a limited company in 2024 is small, at £12 it really shouldn’t be something that puts you off starting a company. You can always save this money by opening a limited company via Tide as well as take advantage of their £50 cashback offer when you do so. 

Alternatively you can open a limited company directly on the Gov.uk website or use an online agent to do this for you. Many accountants will also help you open up a limited company, they will typically then charge you the £12 fee, note they may also charge a fee for their time too so make sure you check.