The first five decisions when setting up a UK company
Registering takes an afternoon. Four of these five decisions are difficult or expensive to reverse afterwards, and most people make them in that same afternoon without noticing.
Incorporating a company in the UK is genuinely quick and cheap, which is the problem: the form asks you several questions that look administrative and are not. Here are the ones worth thinking about before you start filling it in.
1. Whether to incorporate at all
A sole trader keeps simpler accounts, files one return, and can stop trading by stopping. A limited company separates your liability from the business's, is often more tax-efficient above a certain profit, and is expected by some clients and most investors. It also commits you to annual filing whether or not you traded, and publishes your accounts. Neither is the right answer generally; the profit level and who your customers are decide it.
2. The share structure, if there is more than one of you
This is the decision that ends friendships. Two people splitting shares equally because it feels fair have created a company where neither can decide anything if they disagree. It is also the decision hardest to undo: taking shares back from somebody who has left requires their cooperation or a costly dispute. A shareholders' agreement written while everybody is still optimistic is the cheapest legal document you will ever buy.
3. Your registered office address
It is published, permanently and searchably. Using your home address means your home address is public and stays in historical records even after you change it. A service address costs very little by comparison.
4. The accounting reference date
Set by default to the end of the month you incorporated in, which is an accident of when you happened to file. It determines your filing deadlines and your first accounting period — which can be up to eighteen months long, a detail worth understanding rather than discovering.
5. Which name you can actually use
Availability at Companies House is not the same as being free to use it. A name nobody has registered as a company may still be somebody else's trade mark, and trade mark rights beat company registration. Checking the trade mark register and the domain at the same time as the company name takes ten minutes and occasionally saves a rebrand.
What you are committing to afterwards
- A confirmation statement every year, even with no activity.
- Annual accounts, filed and public.
- A corporation tax return, on a different cycle from the accounts.
- Keeping the register of people with significant control current.
The registration process itself is documented on gov.uk.
This is general information about how a process works, not advice about your situation. Thresholds, fees and deadlines change — check the official source linked above for the current figures, or ask a professional who can see your circumstances.