A Step-by-Step Guide to Forming a Limited Company

Forming a limited company in the UK is a straightforward process, but there are several steps to work through before your company can be registered. Getting each one right first time avoids delays and reduces the chance of your application being rejected.

This guide walks you through everything you need to prepare, from choosing your company structure to completing identity verification and submitting your application.

Key Takeaways

• The first step is choosing the right company structure. The three main types are limited by shares, limited by guarantee, and limited liability partnership. Each works differently in terms of ownership, profit, and governance.
• Your company name must be unique on the Companies House register, comply with naming rules, and end with "Ltd," "Limited," or "LLP" depending on your structure.
• Every limited company must have at least one director. A company secretary is optional. Directors must be over 16 and not disqualified or bankrupt.
• You need at least one shareholder or guarantor. In many small companies, the director and shareholder are the same person.
• All directors and PSCs must complete identity verification with Companies House and obtain a personal code before a company can be registered.
• You need a registered office address in the UK before you can register. This address appears on the public Companies House register.
• Your company must be assigned a Standard Industrial Classification (SIC) code that describes your business activity.

Step 1: Choose Your Company Structure

The structure you choose determines how your company is owned, how profits are distributed, and how it is governed. There are three main types to consider.

Limited by Shares

This is the most common company structure in the UK. The company is owned by its shareholders, who have certain rights including voting on significant decisions such as changes to ownership or business operations.

Limited by shares companies exist to make a profit, which can be distributed to shareholders as dividends. This structure suits most commercial businesses. Find out more about companies limited by shares.

Limited by Guarantee

Limited by guarantee companies are most commonly used by non-profit organisations, charities, and community groups. Instead of shareholders, they have guarantors who agree to contribute a nominal amount if the company is wound up.

There are no shares and no dividends. Any surplus income is reinvested into the organisation's activities rather than distributed to its members. Find out more about companies limited by guarantee.

Limited Liability Partnership (LLP)

An LLP is a business structure with two or more members. It combines the flexibility of a partnership with the legal protection of limited liability. Members are not personally liable for the LLP's debts beyond what they have invested.

LLPs are popular with professional services firms such as law practices and accountancy firms. They have members rather than directors or shareholders, and profits are shared between members according to their agreement. Find out more about limited liability partnerships.

Step 2: Choose Your Company Name

Your company name must be unique and comply with Companies House naming rules. It cannot be identical or too similar to an existing registered company name or trademark.

The name must end with "Ltd" or "Limited" for companies limited by shares or by guarantee, or "LLP" for a limited liability partnership. Certain words are restricted and require additional approval, including terms like "Royal," "Bank," "Trust," and "Accredited." Offensive words will not be accepted.

Your registered company name can be different from your trading name. The trading name is what you use with customers day-to-day, while the registered name is what appears on the Companies House register. Check if your company name is available.

Step 3: Appoint Your Director and Optionally a Company Secretary

Every limited company must have at least one director. The director is legally responsible for running the company and ensuring it meets its obligations to Companies House and HMRC.

To qualify as a director, you must be at least 16 years old and not be disqualified from acting as a director or declared bankrupt. There's no requirement to be a UK resident. A company secretary is optional for private limited companies, though some businesses choose to appoint one to help manage administrative responsibilities.

For more on how directors can pay themselves, see our guide on paying yourself as a limited company director.

Step 4: Choose Your Shareholders, Guarantors, and PSC

A limited by shares company needs at least one shareholder. A limited by guarantee company needs at least one guarantor. In many small businesses, the director and shareholder or guarantor are the same person.

Identifying Your Person with Significant Control (PSC)

You must also identify anyone who qualifies as a Person with Significant Control (PSC). A PSC is someone who:

• Holds 25% or more of the company's shares
• Holds 25% or more of the voting rights
• Has the right to appoint or remove the majority of the board of directors

Every company must register PSC information with Companies House and keep it up to date. From 18 November 2025, companies are no longer required to maintain their own internal registers of directors, secretaries, and PSCs. The obligation to file and maintain this information at Companies House remains unchanged. Find out more about the changes to company registers.

Step 5: Prepare Your Documents

Two core documents are required before you can register your company.

The memorandum of association is a short document signed by all initial shareholders or guarantors. It confirms their intention to form the company and become members of it.

The articles of association set out the rules for how the company will be run. They cover things like how directors are appointed, how decisions are made, and how shares are transferred. Most companies use a standard template, which is provided as part of the formation process when you register through Companies MadeSimple.

Find out more about memorandum and articles of association.

Step 6: Complete Identity Verification and Register Your Company

The final step is registering your company with Companies House. Before you can do this, all directors and PSCs must complete identity verification and obtain a Companies House personal code.

Identity Verification

Identity verification is now a mandatory requirement for all company officers. You will need valid photo ID and proof of address to complete the check. Once verified, Companies House issues you with an 11-character personal code that links your identity to your role at the company.

If you form your company through Companies MadeSimple, we will guide you through the identity verification process and submit the application on your behalf.

Registered Office Address

You must provide a registered office address at the point of registration. This address must be a physical UK address in the same jurisdiction as the one you're registering in. It appears on the public Companies House register.

If you don't want to use your home address, a registered office address service provides a professional business address while keeping your personal address off the public record.

SIC Code

You will also need to select a Standard Industrial Classification (SIC) code. This is a five-digit code that tells Companies House what industry your business operates in. You can select up to four SIC codes if your business spans multiple activities. Find out which SIC code to use.

Once all of this is in place, your application is submitted to Companies House. If everything is in order, your company will be registered and you will receive your Certificate of Incorporation confirming your company name, registration number, and date of incorporation.

Find out how Companies MadeSimple can help you form your company today.

FAQs

What is the difference between a limited by shares and a limited by guarantee company?

A limited by shares company is owned by shareholders who can receive dividends from profits. It suits commercial businesses. A limited by guarantee company has guarantors instead of shareholders and typically doesn't distribute profits. It's most commonly used by non-profit organisations, charities, and community groups.

What are the requirements to become a company director?

You must be at least 16 years old and not be disqualified from acting as a director or declared bankrupt. There is no requirement to be a UK resident. A company can have multiple directors, and in small companies the director is often also the sole shareholder and PSC.

Do I need a company secretary when forming a limited company?

No. A company secretary is optional for private limited companies in the UK. Some businesses choose to appoint one to manage administrative and compliance responsibilities, but it's not a legal requirement.

What identity verification is required to form a limited company?

All directors and PSCs must complete identity verification with Companies House before a company can be registered. This involves submitting valid photo ID and proof of address. Once verified, Companies House issues a personal code that must be provided as part of the formation application.

Can I use my home address as the registered office?

Yes, but it will appear publicly on the Companies House register. Many business owners use a registered office address service to keep their home address private while still meeting the legal requirement for a UK registered office.

What is a PSC and does every company need one?

A PSC is a Person with Significant Control, someone who holds 25% or more of shares or voting rights, or has the right to appoint or remove the majority of directors. Most companies have at least one PSC, and their details must be registered with Companies House and kept up to date.

What happens after my company is registered?

Once Companies House accepts your application, your company is officially incorporated. You will receive a Certificate of Incorporation confirming your company name, registration number, and date of incorporation. From that point, your company legally exists and can begin trading, open a business bank account, and take on employees.

This article is for general information only and does not constitute legal or tax advice. Companies House requirements, identity verification rules, and company law can change. Always check current guidance on GOV.UK before submitting your application, and consider speaking to a qualified professional if you are unsure about the right structure for your business.