Step 1 — Decide on the structure

Confirm a limited company is actually the right structure for you. Below about £30–40k of profit, sole-trader status is usually simpler and not much less tax-efficient. Above that, the Ltd often wins. Check our sole trader vs Ltd guide for the framework.

Step 2 — Choose a company name

Search Companies House to confirm your preferred name is available and not too similar to existing ones. Avoid restricted words and steer clear of trade marks. Decide between Limited and Ltd in the suffix (either is fine; pick one).

Step 3 — Plan share structure

Most small companies start with one class of ordinary shares. If you'll have multiple founders, decide split early. If you might raise SEIS/EIS investment later, keep it ordinary and simple. Don't over-engineer share classes day one — you can issue more later.

Step 4 — Incorporate at Companies House

File form IN01 (or use a formation agent / your accountant). You'll need: company name, registered office, directors, shareholders (subscribers), share details and SIC code (industry classification). With IGI it's part of our free company formation.

Mind your registered office

Your registered office is on the public record. Many directors choose a service address from day one rather than their home.

Step 5 — Register with HMRC

  • Corporation Tax — register within 3 months of starting to trade.
  • PAYE — if you'll pay anyone (including yourself as director).
  • VAT — required if you'll cross the threshold; optional below.
  • CIS — if you'll engage subcontractors in construction.

Step 6 — Open a business bank account

Don't trade through a personal account. A separate business account makes bookkeeping clean and protects the company's separate legal identity. Many digital banks open accounts within 1–3 days.

Step 7 — Set up bookkeeping software

Set up MTD-ready bookkeeping software from day one — bank feed, receipt capture, customer/supplier list. Get into a weekly rhythm of categorising transactions. By year two this is just a habit; by year three it pays for itself many times over.

Step 8 — Your first-month routine

  1. Confirm your year-end (Companies House sets one by default; you can adjust).
  2. Set up director's payroll at the right level.
  3. Issue and store share certificates.
  4. Maintain the statutory registers.
  5. Build a tax savings pot from the first invoice.
We handle all of this for free

IGI clients get free company formation and all of the above included in their plan from day one. Get a quote.