There are many factors to consider when setting up and registering a limited company, and cost is one of the most important ones. How you choose to set up your company will impact the financial cost, however, spending a little more to ensure the registration process is completed seamlessly will help to mitigate potential future stress should you forget something or make a mistake.
Our guide aims to shed light on the cost of setting up a limited company and help you make the right decision for your limited company registration.
Why Set Up a Limited Company?
Unlike other business types, a limited company separates company and personal assets to limit personal liability should difficulties arise. Unlike an unlimited company, a limited company does not require owners to supplement business financial shortcomings with personal finances, assets and belongings.
Setting up a limited company can be cheap and simple, whilst ensuring private assets are safe, making them beneficial for small business owners who want to limit personal risk.
How Much Does It Cost to Set Up a Limited Company?
As mentioned above, the process you choose to set up your limited company plays a huge part in the price you pay for its formation. The final total for the cost of your company's formation will depend on your business's unique needs and what assistance you may need during the formation process.
If you’re a confident entrepreneur with previous experience in setting up companies, you can register online through the Companies House. Alternatively, you can take advantage of a company formation specialist’s expertise and experience with an online formation service from CFS Formations, starting at £67.95 for a ready-to-trade limited company formation in as little as a few hours, with added convenience and support from a team of specialists included.
The overall cost of your company set up can increase if you choose additional features, such as having your company fully ready to trade or receiving accountancy help. Generally, the easier and more comprehensive you want the registration process to be, the more you’ll spend.
Ways to Set Up a Limited Company
Setting Up a Company Yourself Using Companies House
Setting up your limited company yourself using the Companies House website is considered the most cost-effective option for business owners comfortable and confident in managing the process themselves.
Companies House has a registration fee and does require the preparation of essential company information and documents such as the Memorandum of Association and Articles of Association. These documents are essential to formation and detail the processes and rules the company will follow during its operations.
As part of the company formation process, you’ll also need to register for Corporation Tax, which determines the profits your business is taxed on. This tax applies to all companies operating within the UK, and unlike other taxes, it doesn’t arrive as a bill. This means it’s your responsibility to manage, calculate, and report your Corporation Tax accurately to avoid penalties and ensure compliance with HMRC regulations. Proper management of your Corporation Tax obligations is essential for the smooth formation and operation of your business.
Once you have submitted your company information to the Companies House, registration usually takes around 24 hours to be completed. However, during periods of increased applications, this process can take longer and delay your formation.
Summary:
- Requirements: You must provide a company name, appoint directors and shareholders, and prepare essential documents like the "Memorandum of Association" and "Articles of Association."
- Details: Registration can usually be completed online within 24 hours, and you’ll be required to set up your Corporation Tax at the same time.
Setting Up a Limited Company via Postal Application
Applying for company formation by post has the same requirements as applying online; however the process is completed via post, rather than online.
Postal registration may be favourable for your formation should you prefer paper-based communications for your business; however, the postal time makes the process longer than online submission. Due to the postal of your information and documents, formation can take 8-10 days, with some formations exceeding this timeframe in periods where there is a high volume of applications.
Summary:
- Requirements: You must provide the same information and documents required by the Companies House as an online application.
- Details: This option is suitable for those who prefer paper-based submissions but is less convenient due to the extended 8-10 days processing time.
Setting Up a Limited Company Using a Company Formation Agent
Online formation services such as CFS are preferred by many businesses thanks to additional specialist help and timely formation completion.
Since formation services are conducted by experienced company formation specialists and accountants, they are often favoured by businesses looking for hassle-free, quick formation. Many service providers offer various tiers of service, with optional extras to aid your business with complicated paperwork and application compliance. Additionally, applications can be completed in as little as 3 - 24 hours, with CFS's record formation taking just 6 minutes.
Summary:
- Cost: Starting at £53.50.
- Time: Most applications are completed within 3 to 24 hours.
- Details: Formation services handle all the paperwork for you, ensuring accuracy and compliance. They also provide expert guidance and optional features such as registered office addresses and accountancy support.
How Long Does It Take to Set Up a Limited Company?
The time required to set up a limited company depends on the process you select.
If you use a formation agent, registering your company online can take as little as a few hours, with most applications completed within 3 to 24 hours. Registering directly with Companies House typically takes 24 hours, although this can vary depending on the volume of applications being processed.
For those opting for postal application, the process takes significantly longer—8 to 10 working days—making it the slowest and least convenient option for those looking for a simple process to register a company.
What You Need to Form a Limited Company
When setting up a limited company in the UK, several key details must be provided:
Company Name
Limited companies are required to end with either "Limited" or "Ltd" and comply with naming guidelines set by Companies House. It’s essential to ensure the name is unique and does not conflict with existing businesses. You can check if your preferred company name is available and within guidelines by using a company name checker here.
The Registered Business Address
Your limited company must have a registered office address in the UK. This is the official address where all government correspondence will be sent. If needed, company formation agents like CFS can supply a registered address for you.
Appointed Company Director/s
At least one company director is required. The director(s) will manage the company’s operations and ensure compliance with all legal obligations.
Appointed Shareholders
A minimum of one shareholder is required to form a company. Shareholders own the company and may also serve as directors.
Minimum Share Capital
The minimum share capital required is just £1, with no maximum limit, allowing flexibility in structuring your business ownership.
How CFS Formation Services Work
Formation services are increasingly popular due to their convenience and efficiency. All required details are submitted online, and you can review and amend your information before submission. Once your application is processed, you’ll receive a Certificate of Incorporation and share certificates, confirming the legal status of your new company.
These services also handle complex paperwork and provide specialist advice on financial matters such as bookkeeping and tax compliance. With CFS, all costs are included in the package, so there are no hidden fees. For set up including all government fees, CFS charges £67.95 for a ready to trade company, covering the entire formation process, expert advice and additional support. This minimal extra cost makes this an attractive option for business owners.
Choosing Your Formation Package
Many formation agents typically offer tiered packages to suit different needs and ease the process of registering a company.
Reserve a Company Name - £53.50
CFS's cheapest package covers the basics you need to register a company. Including fast online formation, Government fees included in the price, and emailing of your certificate of incorporation upon formation, this tier is ideal for fast, reliable company creation.
E-Mail Package - £67.95
The most popular package for company registration, our E-Mail package includes full registration of your limited company with the Companies House, along with follow-up e-mailing of various documents including Articles of Association, share certificates, company register, Memorandum of Association, reminders and more.
Along with emailed assets for added convenience, CFS also provide 3 months of free accountancy, free UK business bank account referral, and everything else your business needs to be ready to trade from formation.
Business Package - £199
As the most expensive package we offer for company registration, our Business Package offers the highest levels of service and convenience.
Alongside the registration of your business and e-mailing of all your company certifications and documents, the Business Package offers additional fraud protection, a bound company register, printed copies of certifications and documents, and much more.
The Business Package is ideal for business owners looking for a seamless formation process from formation specialists with years of experience in the industry.
The costs involved in forming your limited company are widely dependent on the support and guidance you require for its registration. Although some packages may seem expensive now, these are minimal when compared to the ongoing costs of running the business. Setting up your business with CFS not only gives you access to expert advice and guidance, it also gives you peace of mind that your new business is legally ready to begin operations.
Ready to register your limited company? Find your Limited Company Formation Package today.
Testimonial
"I am very impressed with the service that CFS provided for the setup of my Seychelles Company. They made the process very easy and straight forward. I would recommend using CFS"
Individual, Norway
