If you’re a UK entrepreneur, then you’re probably wondering how much it costs to set up a limited company. There are many different incorporation services and fees to consider, so it can be difficult to know where to start. In this blog post, we will provide a comprehensive guide to the cost of setting up a limited company in the UK.
We’ll cover all the different incorporation services and fees, as well as some helpful tips on how to save money on your business formation. Let’s get started!
What is a limited company?
A limited company is a business structure that offers limited liability protection to its shareholders. This means that if the company is sued or goes into debt, the shareholders will not be held responsible for these debts.
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Limited companies are also required to file annual accounts with Companies House, which makes them more transparent than other business structures.
There are two types of limited companies in the UK: private limited companies and public limited companies.
- Private limited companies are the most common type of company in the UK, and they can be either ‘owner-managed’ or ‘professionally managed’.
- Public limited companies are larger businesses that are listed on a stock exchange.
How much does it cost to set up a limited company?
The cost of setting up a limited company in the UK varies depending on the type of company and the incorporation service you use. Private limited companies can be incorporated online for as little as £20.
There are many different incorporation services available, so it’s important to compare the fees and services offered before you choose one. We’ve compiled a list of the most popular incorporation services below, along with their respective fees:
- Company formation agents: £20-£100+
- Online company formation services: £20-£100
- Accountants: £200-£1000
- Solicitors: £500-£2000
So, how much does it cost to set up a limited company? As you can see, there is a wide range of prices when it comes to setting up a limited company in the UK. The most important thing to remember is to compare the services and fees offered by each provider before making your final decision.
What are the different types of incorporation services?
There are four main types of incorporation services: company formation agents, online company formation services, accountants, and solicitors.
Company formation agents are the most popular type of service for incorporating a private limited company in the UK. They offer an affordable and straightforward way to set up your company, with prices starting at just £20.
Online company formation services are similar to company formation agents, but they allow you to incorporate your company online. This can be a convenient option if you’re comfortable doing the paperwork yourself.
Accountants and solicitors are both professional service providers that can help you with the incorporation process. However, they tend to be more expensive than company formation agents and online services. Accountants typically charge between £200 and £1000, while solicitors can charge up to £2000.
How can I save money on my business formation?
There are a few ways you can save money on your business formation:
- Use an online company formation service: Online company formation services are often cheaper than using a company formation agent or professional service provider.
- Do it yourself: If you’re comfortable with the paperwork, you can save money by incorporating your company yourself.
- Negotiate fees: If you’re using a professional service provider, try to negotiate a lower fee. Many providers are willing to negotiate, especially if you’re a start-up or small business.
Incorporating a limited company in the UK doesn’t have to be expensive. By using an online company formation service or doing it yourself, you can save money on your business formation.
Choosing how to incorporate
The first thing you need to do when setting up a limited company is to choose an incorporation service. There are many different options available, and the price will vary depending on the service you choose.
For example, some services will include registered office fees and company formation documents, while others will not. You’ll need to decide what’s important to you and your business before you can choose the right service.
Prices to register a limited company
Once you’ve chosen an incorporation service, the next step is to pay the fees. The cost of setting up a limited company will vary depending on the service you choose, but typically, it will cost between £20 and £2000.
If you’re using a formation agent or company formation service, they will usually charge a fixed fee, which will be included in the total cost.
Ongoing costs of running the company
Finally, you’ll need to consider ongoing costs associated with running a limited company. Other costs to consider can include:
- Registered office fees
- VAT returns (if you register for VAT)
- Accounting and bookkeeping fees
- Corporation tax
- Annual return filing fees
- Payroll services (if you begin employing people or want to put yourself on payroll)
The cost of these services will vary depending on the size and complexity of your business, but typically, they will cost between £200 and £2000 per year. When it comes to asking “How much does it cost to set up a limited company?”, there are far more costs involved than just the initial incorporation.
Starting a limited company – options compared
Now that you know the basics of how much it costs to set up a limited company, let’s take a closer look at some of the different incorporation services and fees.
Company formation agents – typical cost: £20-£100+
The first option is to use a company formation agent. These agents will typically charge a fixed fee for their services, which will be included in the total cost of setting up your company. The benefit of using a company formation agent is that they will handle all the paperwork and requirements for you, which can save you time and hassle.
Company formation services – typical cost: £20-£100
The second option is to use a company formation service. These services usually have an online presence and will charge a lower fee than company formation agents. The benefit of using a company formation service is that you can often do the entire process yourself, which can save you money.
Online incorporation services – typical cost: £20-£100
The third option is to use an online incorporation service. These services are becoming more popular as they offer a fast and simple way to set up your company. This option is popular with entrepreneurs who want to save time and money on their business formation.
Accountants or solicitors – typical cost: £200-£2000
Accountants and solicitors are both professional services that can assist you with the incorporation process. They, however, tend to be more costly than corporate formation agents and internet-based services. Accountants typically charge between £200 and £1000, depending on a variety of factors, while solicitor fees range up to £2000.
Detailed step by step guide to setting up a limited company
If you’re looking for a more detailed guide on setting up a limited company, we’ve got you covered. Check out our step-by-step guide to incorporating your business. This guide will walk you through the entire process, from choosing an incorporation service to filing your annual accounts.
- Choose an incorporation service
The first step in setting up a limited company is to choose an incorporation service. There are many different options available, and the price will vary depending on the service you choose. For example, some services will include registered office fees and company formation documents, while others will not. You’ll need to decide what’s important to you and your business before you can choose the right service.
- Pay the fees
Once you’ve chosen an incorporation service, the next step is to pay the fees. The cost of setting up a limited company will vary depending on the service you choose, but typically, it will cost between £20 and £2000. If you’re using a formation agent or company formation service, they will usually charge a fixed fee, which will be included in the total cost.
- File the paperwork
The next step is to file the paperwork with Companies House. This can be done online, by post, or in person. The cost of filing the paperwork will depend on the service you use, but it typically costs between £20 and £100.
- Register for Corporation Tax
The next step is to register for Corporation Tax. This can be done online, by post, or in person. The cost of registering for Corporation Tax will depend on the service you use, but it typically costs between £10 and £150.
- File your annual accounts
The final step is to file your annual accounts with Companies House. This can be done online, by post, or in person. The cost of filing your annual accounts will depend on the service you use, but it typically costs between £50 and £100.
Final words
Incorporating your business is a big decision, but it doesn’t have to be a difficult one. With a little bit of planning and research, you can find the right incorporation service for your business and save money in the process. And how much does it cost to set up a limited company? By now, you should now the answer!
Frequently asked questions
The cost of setting up a limited company will vary depending on the incorporation service you choose. typically, it will cost between £20 and £500.
There are many benefits to setting up a limited company, including protection of your personal assets, tax advantages, and increased credibility.
The time it takes to set up a limited company will vary depending on the incorporation service you choose. typically, it will take between one and two weeks.
To set up a limited company, you’ll need to file the paperwork with Companies House and register for Corporation Tax. You’ll also need to appoint directors, shareholders, and a company secretary.
The first step is to choose an incorporation service. Once you’ve chosen a service, you’ll need to pay the fees and file the paperwork with Companies House. After that, you’ll need to register for Corporation Tax and appoint directors, shareholders, and a company secretary. Finally, you’ll need to file your annual accounts with Companies House.