How to Register a Private Limited Company in the UK

James
Jul 22, 2025
4 min read

Starting a business in the UK requires navigating a robust corporate legal framework. Selecting the appropriate legal structure is essential to save time, effort, and costs. A Private Limited Company (LTD) is a popular choice for small and medium-sized enterprises (SMEs) due to its flexibility, limited liability, and credibility. This guide explains what an LTD is, its benefits, types, and the step-by-step process to register one in the UK for the 2025/26 tax year.

What is a Private Limited Company (LTD)?

A Private Limited Company (LTD) is a legally independent entity, separate from its owners, widely used by SMEs in the UK. It can enter contracts, own assets, secure loans, and operate under its own name, with owners’ liability limited to their investment or guarantee.

Why Choose an LTD?

Limited Liability: Shareholders (for companies limited by shares) or guarantors (for companies limited by guarantee) are only liable up to their share capital or agreed guarantee, protecting personal assets.
Tax Efficiency: LTDs benefit from Corporation Tax (19% or 25% for 2025/26, based on profits) and can distribute profits as dividends, often more tax-efficient than sole trader income.
Simple and Affordable Setup: Registration costs as little as £12 online and can be completed remotely, with no need to visit the UK.
Professional Credibility: An LTD enhances trust and facilitates business dealings compared to sole trader status.

Types of LTD Companies

Limited by Shares

Purpose: Suited for profit-making businesses, ideal for SMEs.
Structure: Owned by shareholders holding shares, with profits distributed as dividends.
Liability: Shareholders are liable only for their shares’ value.
Finances: Company assets and finances are separate from shareholders’ personal funds.

Limited by Guarantee

Purpose: Used for non-profits, charities, or community projects.
Structure: Founded by guarantors who pledge a nominal amount (e.g., £1) to cover debts if the company fails.
Liability: Guarantors’ liability is limited to their pledged amount.
Finances: Company finances are separate from guarantors’ personal assets.

Choose limited by shares for profit-driven ventures or limited by guarantee for non-profit initiatives, aligning with your business goals.

Can Non-UK Residents Register an LTD?

Yes, non-UK residents can register an LTD without living in the UK. There are no residency requirements for directors or shareholders, and the process is fully online. However, you must provide a UK registered office address (virtual office services are acceptable) and comply with UK tax and reporting obligations.

Steps to Register an LTD

Follow these steps to register your LTD with Companies House, the UK’s official registrar:

1. Choose a Company Name

Ensure the name is unique and not registered. Check availability on the Companies House website.
Avoid “sensitive” words (e.g., “Royal” or “Bank”) without approval.
Include “Limited” or “Ltd” at the end for both share and guarantee companies.

2. Appoint Directors and Shareholders/Guarantors

Appoint at least one director (aged 16+, no residency requirement).
For limited by shares, specify shareholders and their share allocations.
For limited by guarantee, list guarantors and their guarantee amounts (e.g., £1).
Identify “Persons with Significant Control” (PSCs)—those with over 25% of shares, voting rights, or significant influence.

3. Prepare Key Documents

Memorandum of Association: A legal statement signed by initial shareholders or guarantors, confirming their intent to form the company.
Articles of Association: Rules for company operations. Use Companies House’s default model articles or customise with legal advice.
Registered Office Address: A UK address for official correspondence (P.O. boxes are not permitted; virtual offices are common for non-residents).
Standard Industrial Classification (SIC) Code: Select a code reflecting your business activities.

4. Register with Companies House

Online: Fastest and cheapest (£12 fee in 2025, payable online). Complete the form on gov.uk with company details, director information, and PSCs. Approval typically takes 24 hours.
By Post: Use form IN01 (£40 fee). This is slower and less common.
Via Agent: Engage a formation agent or accountant (e.g., Foundry Accounting) for complex setups or non-resident registrations.

5. Register for Taxes with HMRC

Corporation Tax: Register within three months of starting business. LTDs pay 19% (profits up to £50,000) or 25% (profits over £250,000, with marginal relief between) for 2025/26.
VAT: Register if taxable turnover exceeds £90,000 annually (2025/26 threshold). Voluntary registration can allow VAT reclamation on purchases.
PAYE: Register if the LTD employs staff or pays directors’ salaries, deducting Income Tax and National Insurance Contributions (NICs).

6. Open a Business Bank Account

A separate account is recommended to manage company finances. UK banks, including digital options like Starling or Monzo, cater to LTDs and non-residents.
Provide your Companies House registration number and Unique Taxpayer Reference (UTR) when applying.

7. Meet Ongoing Obligations

Annual Confirmation Statement: File annually with Companies House (£13 online in 2025) to confirm company details.
Annual Accounts: Submit to Companies House and HMRC (deadlines vary by incorporation date).
Corporation Tax Return: File within 12 months of your accounting period end.
Record-Keeping: Retain income, expense, and transaction records for at least six years.

Tax Obligations for an LTD

Corporation Tax: 19% on profits up to £50,000; 25% above £250,000 (2025/26). File a Company Tax Return annually.
Dividends: Shareholders pay Income Tax on dividends (8.75% Basic Rate, 33.75% Higher Rate, 39.35% Additional Rate for 2025/26). A £500 Dividend Allowance is tax-free.
VAT: If registered, charge 20% VAT on applicable goods/services and file quarterly returns.
PAYE and NICs: Deduct Income Tax and Class 1 NICs (e.g., 12% on earnings between £12,570 and £50,270) for salaries paid to directors or employees.

Example

You register an LTD limited by shares, appoint yourself as sole director and shareholder, and earn £80,000 in profits in 2025/26:

Corporation Tax: £50,000 × 19% + £30,000 × 25% = £9,500 + £7,500 = £17,000.
Dividends: Paying yourself £50,000 in dividends, the first £500 is tax-free. The remaining £49,500 at 8.75% (Basic Rate) = £4,331.25 personal tax.
Total Tax: £17,000 (company) + £4,331.25 (personal) = £21,331.25.

Need Support?

Registering and managing an LTD involves legal and tax complexities, particularly for non-residents or visa holders (e.g., Global Talent or Innovator Founder). Foundry Accounting’s experts can assist with company formation, tax registration, vat return service and ongoing compliance. Contact us at foundryaccounting.co.uk for tailored guidance to ensure your business succeeds.