How much money do you need to set up a Limited Company in the UK?

PHS Team

20 Oct, 2025

Starting your own business is exciting, and setting up a limited company is the best choice for many entrepreneurs. But how much does it actually cost to set up a limited company?

To set up a limited company in the UK, you need to pay a registration fee to Companies House. The current fee for online registration is £50, which is the most popular and fastest option. If you prefer to register by post, the cost is £71, reflecting the longer processing time.

Understanding the costs involved can help you plan your budget and get your new business off to the right start.

What is a limited company?

A limited company is a business that’s legally separate from its owners. It can own things, make contracts, and is responsible for its own debts.

Setting up a limited company in the UK is worth it because it provides financial protection, tax advantages, and a professional image. Limited companies pay corporation tax, often lower than personal income tax, and can distribute profits through dividends to save on tax. They also help build credibility with clients and investors, making it easier to grow your business.

The Basic Cost of Setting Up a Limited Company

The minimum legal cost involved in setting up a limited company is simply the registration fee paid to Companies House, which is the official UK government body that deals with company registrations.

• Online registration with Companies House costs £50. This is the most common and quickest method, with most companies being set up within 24 hours.
• Postal registration costs £40 but generally takes several days to process and is less commonly used today.
• Some people also use formation agents (third-party companies) to register their companies. These agents charge anywhere from £15 to £100+, depending on the level of service and extras they provide.

So, the essential starting cost of setting up a limited company ranges from £40 to over £100 if using agents, but direct registration online via Companies House at £50 is the most affordable and best way.

Additional Costs to Consider When Setting Up a Limited Company

While the £50 registration fee covers the official formation of the company and basic legal paperwork, there are other costs that new business owners should keep in mind:

1. Professional Help and Legal Advice

• If your business has complex needs, such as multiple shareholders or bespoke articles of association, hiring an accountant or solicitor can be helpful.
• Accountants or lawyers may charge several hundred pounds just to set up the company and draft necessary agreements.
• For simple companies, model articles provided by Companies House are sufficient and free, but for complex setups, professional fees can run from £100 to over £200.

2. Business Bank Account Setup

• Setting up a dedicated business bank account is advisable for limited companies to keep personal and business finances separate.
• While many business bank accounts are free to open and maintain for the first year, some banks may charge monthly fees, depending on the provider.
• Some formation agents offer packages that include support for opening a business bank account, sometimes bundling the service with company formation.

3. Other Initial Business Costs

• Office address or virtual office services: Some companies opt to use a commercial registered address service.
• Purchase of company seals, stationery, or branding materials can also add to early expenses, but are optional.
• If you choose to buy company formation packages, these might include extras like business websites, VAT registration help, or domain names, all of which increase initial costs.

How to Keep Costs Low When Setting Up a Limited Company

Starting a limited company doesn’t have to be expensive. With a few smart choices, you can keep your setup costs to a minimum while still getting everything you need in place.

• Register directly with Companies House online to pay only the £50 fee.
• Use free model articles of association unless your business setup requires special clauses.
• Delay non-essential expenses like virtual office addresses or premium formation packages.
• Use online business bank accounts with introductory free periods to minimise initial banking fees.

Conclusion

Setting up a limited company in the UK is simpler and more affordable than many people think. At its core, you only need £50 to officially register through Companies House online.

However, if your business setup is complex or you want additional help and services, such as accounting, legal advice, bank account setup support, and dedicated business services, it's wise to budget some extra funds. These additional expenses vary widely depending on individual needs.

How PHS Associates Help You

If you want help with setting up a limited company, PHS Associates can assist you throughout the entire process. Our expert team guides you with the necessary paperwork, ensuring your registration is accurate and compliant with UK regulations. 

If you need support, call us at  0208 8611685 or email info@phs-uk.co.uk  today. With PHS Associates, you get professional support to establish your limited company quickly and correctly, allowing you to focus on growing your business with confidence.

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