Starting a company in the UK

Most people who start a business in the UK set up as a sole trader or as a limited company. The choice changes who is responsible for the debts, what has to be filed and how tax is paid. Here is what GOV.UK and Companies House say about each step, and what falls due in the first year.

Sole trader or limited company

A sole trader is personally responsible for all the debts of the business. GOV.UK calls this unlimited liability. A limited company is legally separate from the people who own it. Its owners are responsible for its debts only up to the value of their financial investment.

A sole trader can start trading straight away. They must register for Self Assessment if they earn more than £1,000 in a tax year. A company must be registered before it starts trading, and it pays Corporation Tax on its profits. GOV.UK says a business can move from one structure to another, and that moving from sole trader to limited company is usually easier.

In a partnership, the partners personally share responsibility for the business. Limited liability partnerships and community interest companies have their own rules.

Choosing a name

A company's name cannot be the same as another registered company's name. Companies House's example of names it treats as the same is "Hands UK Ltd" and "Hand's Ltd" match "Hands Ltd".

The name must usually end in "Limited" or "Ltd". A sensitive word, or a name suggesting a link with government, needs permission. A name too close to someone's trade mark may have to change if they complain, so the Intellectual Property Office's trade mark search is a useful second check.

Setting the company up

Since 18 November 2025, identity verification has been a legal requirement for directors and people with significant control. Each director gets a Companies House personal code, and the registration asks for each director's code.

A company needs at least one director and at least one shareholder, who can be the same person. It also needs a registered office address and an email address. The registration names the people with significant control, for example anyone with more than 25% of the shares or voting rights.

On 19 October 2026, GOV.UK gave the fee for registering online as £100. The company is usually set up for Corporation Tax at the same time.

The first year

• A person who becomes a person with significant control gives their personal code when added to the register, or within 14 days.
• The company registers with HMRC as an employer before the first payday, even when the only person it pays is its sole director. It cannot register more than 2 months before it starts paying people.
• The company must register for VAT if its taxable turnover for the last 12 months goes over £90,000, or if it expects to go over £90,000 in the next 30 days.
• The first review period for the confirmation statement ends 12 months after incorporation. The company can file the statement up to 14 days after that.
• The company files its first accounts with Companies House 21 months after the date it registered.
• It pays Corporation Tax 9 months and 1 day after its accounting period ends, and files its Company Tax Return 12 months after that period ends.

The company's own page on the Companies House register shows its next due dates, and Companies House sends free email reminders.

Letters asking for money

Companies House says some organisations send new companies notices asking for money to keep them on a register. The senders it lists include "New Companies Register", "Digital Companies Register" and "National Register of Companies". Companies House says this is not a real fee and it has no connection with them.

For a suspicious letter, Companies House asks people to call it on 0303 1234 500. It also asks them to pay nothing to the sender and to keep away from any QR codes or links in the letter.

Useful links

• Set up a business (GOV.UK)
• Set up a private limited company (GOV.UK)
• Choose a company name (GOV.UK)
• Search for a trade mark (Intellectual Property Office)
• Verify your identity for Companies House (Companies House)
• Filing your company's confirmation statement (Companies House)
• Accounts and tax returns for private limited companies (GOV.UK)
• Register as an employer (HMRC)
• When to register for VAT (HMRC)
• Reporting scams pretending to be from Companies House (Companies House)