TL;DR: The Cost of Setting Up a Limited Company

If you want a quick overview, here’s the typical cost of setting up a limited company in the UK:

• The minimum cost is £100 if you register your company directly through Companies House online. This is an incorporation fee and is a one-off fee.
• Registering by post costs £124, while same-day registration costs £156.
• Using a company formation agent usually costs between £15 and £100+, depending on the services included.
• Some accountants will register your company for free if you sign up to their monthly accounting services.
• In reality, most new businesses spend between £100 and £500 to get fully set up.

However, the registration fee is only the starting point. Many businesses also incur additional setup costs such as a registered office address, business current account (an essential feature for managing company finances), insurance, and accounting support. Hence why many limited companies search for accountants near me to get it sorted

On top of this, once your company is formed there are ongoing compliance costs such as annual confirmation statements, accountancy fees, and bookkeeping software.

Understanding these costs early can help you budget properly and avoid surprises when starting your business.

How Much Does It Cost to Set Up a Limited Company?

The cost of setting up a limited company in the UK can vary depending on how you choose to register your business and whether you use additional services.

At the most basic level, you can register a private limited company directly with Companies House, the UK’s official company register. This is the cheapest option and costs £100 if you apply online, with the company usually being registered within one business day.

However, many new business owners choose to use a formation agent or accountant to help with the process. These services can simplify the paperwork, ensure everything is compliant, and sometimes include additional features such as registered office addresses or business bank account setup.

Because of these different options, the total setup cost of forming a limited company can range significantly. The setup cost typically covers the company registration fee, but may exclude additional services such as registered office provision, mail forwarding, or business bank account setup, which could incur extra charges.

Typical Cost of Setting Up a Limited Company

Setup Method	Typical Cost
Register directly with Companies House (online)	£100
Register by post	£124
Same-day Companies House service	£156
Formation agent packages	£15 – £100+
Accountant setup service	Free – £200

The table above outlines the typical costs involved in setting up a limited company. In many cases, the minimum cost is simply the Companies House registration fee, which is also known as the incorporation fee. This is a one-off fee paid upfront and is separate from ongoing expenses. For accounting and tax purposes, the incorporation fee is treated as a capital cost, meaning it is not a deductible operating expense.

But most businesses will incur a few additional setup expenses, especially if they want professional support or services such as a registered office address.

It’s also important to remember that the cost of forming the company is only one part of the picture. Once your company is established, there are ongoing costs involved in running and maintaining it, such as filing annual accounts, submitting confirmation statements, and managing your bookkeeping.

Companies House Registration Fee

The main cost involved in setting up a limited company is the Companies House registration fee, also known as the incorporation fee. Companies House is the UK government body responsible for registering and maintaining official records of companies.

If you choose to register your company yourself, this fee is the minimum amount you’ll need to pay to form a limited company legally. During the online registration process, the fee can be conveniently paid using a debit card.

Current Companies House Registration Costs

Registration Method	Cost	Typical Processing Time
Online registration	£100	Usually within one business day
Postal application	£124	Around 8–10 days
Same-day service	£156	Same business day

Online registration is the most common and cost-effective option, as it is both cheaper and significantly faster than submitting your application by post.

What the Registration Fee Covers

When you pay the Companies House registration fee, you are paying for the official incorporation of your business. This includes:

• Registering your company name
• Recording director and shareholder details
• Filing your company’s Memorandum of Association and Articles of Association
• Issuing your Certificate of Incorporation, which confirms that your company legally exists

Once your company has been registered, it becomes a separate legal entity. This means it can enter contracts, open a business current account, and operate independently from its owners.

Information You’ll Need to Register

Before registering your company, you will need to provide several key details, including:

• A unique company name
• A registered office address
• Details of directors and shareholders
• Your company’s SIC code (business activity classification)
• Memorandum and Articles of Association

All directors must also complete identity verification as part of the registration process.

Most of this information can be submitted quickly during the online registration process.

While the Companies House fee represents the core cost of forming a limited company, many business owners choose to use additional services that can make the process easier and more convenient. These services come with their own fees, which we’ll explore next.

Cost of Using a Company Formation Agent

While you can register a company directly through Companies House, many business owners choose to use a company formation agent to handle the process for them. Most formation agents offer a range of packages with different features and price points.

A formation agent is a specialist service provider that registers the company on your behalf and often includes additional features that make the setup process easier.

These services are popular with new business owners because they can save time, reduce paperwork, and ensure everything is completed correctly. Ongoing compliance support is often available as an additional service from formation agents.

Typical Formation Agent Costs

Formation agents usually offer several packages depending on the level of support and additional services included.

Package Type	Typical Price	What’s Usually Included
Basic package	£15 – £30	Company registration and standard documents
Standard package	£30 – £60	Registration + digital certificate + basic support
Premium package	£60 – £100+	Registration + additional services such as registered office address, bank account setup or compliance reminders

Many packages include the Companies House registration fee, meaning you pay a single bundled price as a one-off fee. This one-off fee covers the setup cost of forming your limited company, which may include only the basic registration or additional services depending on the package.

What Formation Agents Typically Provide

Depending on the provider, a formation package may include:

• Company registration with Companies House
• Memorandum and Articles of Association
• Digital Certificate of Incorporation
• Help choosing a company name
• Registered office address services
• Mail forwarding services
• Introductions to business banking providers

Some formation agents also offer additional support services, such as ongoing compliance support, ongoing compliance reminders, or assistance with submitting confirmation statements.

Should You Use a Formation Agent?

Using a formation agent isn’t essential, but it can make the process easier—especially if you’re setting up a company for the first time.

The main advantages include:

• Saving time on paperwork and applications
• Reducing the risk of mistakes during registration
• Access to extra services that may help your business get started faster

Alternatively, for more complex company formations or if you need tailored advice on share structuring and compliance, a specialist accountant can provide expert support and guidance.

However, if you are comfortable handling the registration yourself, registering directly through Companies House is usually the cheapest option.

Beyond the registration process itself, there are also several additional startup costs that many new businesses encounter when setting up a limited company.

Additional Startup Costs to Consider

While the Companies House registration fee is the main cost of setting up a limited company, many businesses incur additional startup expenses depending on how they plan to operate. Other costs, such as business expenses—including ongoing costs like rent, wages, insurance, accounting fees, and filing fees—should also be considered when planning your budget.

Registered Office Address

Every UK limited company must have a registered office address. This is the official address where legal correspondence from Companies House and HMRC will be sent.

Some business owners choose to use their home address. However, because the registered office address is publicly visible on the Companies House register, many prefer to use a registered office address service instead.

Service Type	Typical Cost
Basic registered office address	£10 – £25 per month
Address with mail forwarding	£20 – £50 per month
Premium packages with scanning or additional services	£40 – £100+ per year

Using a service address can help protect your privacy and keep your home address off the public record.

Business Bank Account

Although it isn’t legally required to open a business bank account (also known as a business current account) immediately, most limited companies do so to keep personal and company finances separate.

Many modern business banking providers offer free accounts for new businesses, while some traditional banks charge a small monthly fee after an introductory period.

Bank Account Type	Typical Cost
Free digital banking accounts	£0 per month
Traditional bank accounts	£5 – £10 per month

Having a dedicated business account makes it much easier to track income, manage expenses, and prepare accounts.

Business Insurance

Insurance is another potential startup cost. While it isn’t required for every business, certain types of insurance may be necessary depending on your industry.

Common types of business insurance include:

• Public liability insurance – protects your business if someone is injured or their property is damaged due to your activities
• Professional indemnity insurance – important for consultants and service-based businesses providing advice
• Employers’ liability insurance – legally required if you hire employees

Insurance Type	Typical Starting Cost
Basic small business insurance	£5 – £20 per month
Professional indemnity cover	£10 – £50+ per month

The exact cost will depend on the type of work your company does and the level of cover required.

Domain Name and Business Email

Although not essential for company formation, most businesses also secure a domain name and professional email address early on.

Having a website and branded email can improve credibility and make it easier for customers to find and contact your business.

Item	Typical Cost
Domain name	£10 – £50 per year
Email hosting	£3 – £10 per month

While these startup expenses can increase the total cost of launching your company, many of them are optional and depend on how you choose to run your business.

Once your limited company is set up, there are also ongoing compliance costs you will need to budget for each year.

Ongoing Costs of Running a Limited Company

Once your limited company is set up, there are several ongoing costs and compliance obligations you will need to budget for each year. These ongoing costs are considered business expenses for accounting and tax purposes, and they ensure your company remains compliant with Companies House and HMRC requirements.

While some businesses choose to manage certain tasks themselves, many owners rely on accountants and software to help handle the administrative workload.

Below are the most common recurring costs associated with running a limited company.

Annual Confirmation Statement

Every limited company must submit a Confirmation Statement to Companies House at least once per year. This filing confirms that your company details are accurate and up to date.

The statement includes information such as:

• Company directors
• Shareholders and share structure
• Registered office address
• Standard Industrial Classification (SIC) codes

Filing Method	Cost
Online submission	£34
Postal submission	£62

Many accountants include this filing as part of their annual service package.

Accountancy Fees

Most limited companies hire an accountant to handle tasks such as:

• Preparing annual accounts
• Submitting corporation tax returns
• Providing tax advice
• Managing bookkeeping and compliance

For more complex company structures or advanced tax planning, you may need a specialist accountant with expertise in company formation and tailored financial advice.

The cost of accountancy services varies depending on the size and complexity of your business.

Service Level	Typical Annual Cost
Basic small business accounting	£300 – £600
Full service accounting	£600 – £1,200+

Some accountants also include additional services such as payroll management, VAT returns, and confirmation statement filings.

Bookkeeping Software

Many businesses use cloud-based accounting software to manage invoices, expenses, and financial records.

Popular tools include:

• Xero
• QuickBooks
• FreeAgent

Software Type	Typical Cost
Basic bookkeeping software	£10 – £20 per month
Advanced accounting software	£20 – £30+ per month

Some banks and accountants offer discounts or free subscriptions as part of their service packages.

Payroll Costs (If You Have Employees)

If your limited company employs staff, you will need to manage PAYE payroll and National Insurance contributions.

Many businesses use payroll software or outsource this task to their accountant.

Payroll Service	Typical Cost
Payroll software	£10 – £20 per month
Accountant payroll service	£10 – £50 per month

The exact cost will depend on how many employees you have and whether payroll is included in your accounting package.

How to Reduce the Cost of Setting Up a Limited Company

Although there are several costs involved in starting a limited company, there are also ways to keep your setup costs low without cutting corners on compliance. While sole traders may have lower setup costs, they have different compliance obligations compared to limited companies.

Below are some practical ways to reduce the cost of setting up your business.

Register Directly with Companies House

The cheapest way to set up a limited company is through UK company registration by registering directly with Companies House.

By completing the online application yourself, you only need to pay the £100 registration fee, avoiding additional charges from formation agents or third-party services.

The online process is relatively straightforward and usually takes less than 24 hours for approval.

Use Standard (Model) Articles of Association

When registering your company, you can choose to use the model articles of association provided by the Companies Act 2006.

These standard articles cover the basic rules for running a company and are suitable for most small businesses.

Using the default articles avoids the need for custom legal drafting, which can add extra legal fees during the setup process.

Choose Basic Formation Packages

If you prefer to use a formation agent, choosing a basic package can help keep costs low. Most formation agents offer basic packages at competitive prices.

Many formation agents offer simple packages that include:

• Company registration
• Digital incorporation documents
• Basic customer support

More expensive packages often include add-ons such as mail forwarding or registered office services, which may not be necessary for every business.

Compare Accountants

Accountancy services can vary significantly in price, so it’s worth comparing several providers before committing.

Some accountants offer free company formation when you sign up for ongoing accounting services. Others may charge a small one-off setup fee.

Comparing quotes can help you find an accountant who offers the right balance of cost, service and expertise for your business. If your business requires complex company structures or tailored advice, consider hiring a specialist accountant with expertise in company formation and share structuring.

Use Free or Low-Cost Business Banking

Many modern business banking providers offer free business accounts, especially for startups.

• Digital banks often provide features such as:
• Expense tracking
• Instant payment notifications
• Integration with accounting software

Choosing a free business banking option can help reduce your ongoing operating costs.

Plan Your Budget in Advance

Finally, planning ahead is one of the best ways to keep costs under control.

Creating a basic startup budget can help you:

• Identify which services you actually need
• Avoid unnecessary add-ons

Prepare for ongoing compliance costs

Frequently Asked Questions

What is the cheapest way to set up a limited company?

The cheapest way to set up a limited company in the UK is to register directly with Companies House online, which currently costs £100. This involves completing the application yourself and providing details such as your company name, registered address, directors, and shareholders. If you’re comfortable handling the paperwork, this option allows you to form a company at the lowest possible cost.

Can you set up a limited company for free?

In most cases, you cannot set up a limited company completely free, because the Companies House registration fee must still be paid. However, some accountants and formation agents offer “free company formation” packages where they cover the registration fee if you sign up for ongoing services such as accounting or bookkeeping.

Do I need an accountant to start a limited company?

You do not legally need an accountant to set up a limited company. You can register the company yourself through Companies House. However, many business owners choose to work with an accountant to ensure their company is structured correctly, remains compliant with tax rules, and takes advantage of any available tax efficiencies. For more complex company formations, a specialist accountant can provide tailored advice on company formation, share structuring, and other specific needs.

How long does it take to register a limited company?

If you apply online through Companies House, a limited company can usually be registered within one business day. Postal applications typically take 8 to 10 days, while a same-day service is also available for an additional fee.

What ongoing costs should I expect after setting up a limited company?

After your company is registered, you will need to budget for several ongoing costs, including:

Confirmation Statement filing (£34 per year online)

Accountancy fees for annual accounts and tax returns

Bookkeeping software or accounting tools

Insurance, depending on your industry

Payroll services if you employ staff

These ongoing costs are considered business expenses for tax and accounting purposes. These costs vary depending on the size and complexity of your business, but they are essential to keep your company compliant and running smoothly.