Top 10 tips to registering a company online

This is it: you’ve come up with an incredible idea for a business or decided to start contracting, you’ve got the means and you’ve got the ambition.

Anybody can set up a business and start trading whenever they want to. But if you want to protect your personal finances, give your business the credibility it needs to succeed, and give yourself more contracting opportunities, you’re going to want to register your business as a limited company.

Setting up a UK company online is extremely simple (and quick). But there are a few important things you’ve got to bear in mind before you hop right into the deep end.

This guide will walk you through our top 10 tips to help you register a company online in a matter of hours – summary provided by company formation specialists 1st Formations.

1. Make sure you’re choosing the right company structure

The first thing you’ve got to do is think hard about the type of company structure that would best suit your business.

If you’re considering setting up a private limited company, you’re generally going to have two structure options; either a limited by shares company or a limited by guarantee company.

A limited by shares company is the most popular company structure in the UK. It’s ideal if you want to start up a new commercial (profit-making) business, or if you’re a sole trader looking to take your business to the next level.

Why go for a limited by shares company? The key benefit to setting up a limited company is that it will protect your personal finances.

When you choose a limited by shares company structure, you’re creating a legal wedge between you and your business. As a result, you’ll enjoy limited liability for any business debts you might accumulate — you won’t be personally liable.

Setting up a limited by shares company will also enable you to boost your professional status by presenting your business as an established, credible and trustworthy legal entity. This will help you build your customer base, and it’ll also encourage investors and other businesses that you’re safe and reliable to trade with.

You could also go for a limited by guarantee company structure. A limited by guarantee structure is generally designed for charities and non-profits. There are no shareholders or shares in a limited by guarantee company, and this structure is not for businesses trying to make a profit.

All surplus income generated by a limited by guarantee company gets pumped back into the business to achieve the company’s non-profit objectives — not to pay shareholders.

Finally, you’ve got limited liability partnerships (LLPs). LLPs are designed for professionals who traditionally operate as partnerships. This might include solicitors, accountants or dentists. With this structure, you’re still gaining the same sort of limited financial liability you’d gain with a limited by shares company.

2. Check your company name availability

Next, you’ve got to select an official company name. This name must be totally unique - it can’t even be similar to another name on the register). Fortunately, if you are forming your company with an approved agent such as 1st Formations, we will immediately tell you if your name is or isn’t available (at no cost).

There are a couple of rules you’ve got to follow, which include the banning of offensive or ‘sensitive’ words. For example, if your proposed company name includes the word ‘King’, you would require permission from The Cabinet Office, and if this permission were granted - you would be able to upload the proof of this as a digital document during the company formation process (as well as telling you if a name is available, our name search tool will notify you if your name includes any sensitive words or expressions).

It’s also worth noting that, as a limited company, your chosen name will end with either ‘Limited’ or ‘Ltd’.

3. Use a professional registered office address

When you register a company must include an official company address. This is referred to as a “registered office address”, and it’s where UK Government departments such as Companies House, HMRC and the Information Commissioner’s Office (ICO) will send you important mail and notifications about your company.

It’s essential to be aware that the address you choose will be placed on the official Companies House register of companies. That means it will be published online and publicly (and freely) accessible to anyone who is interested — and so if you’re running a company from your home, this could result in an invasion of your privacy in the future.

To maintain your privacy, you can opt to use a professional registered office address to protect your residential address from the public register and boost your new business’s credibility with an official address is a prime business location.

Fortunately, 1st Formations provide address services that enable limited companies to use our Covent Garden address as their registered office. Then, when government mail for the company arrives at the address, this is securely opened, scanned and then emailed to the recipient.

4. Pick an appropriate share structure

If forming a company limited by shares, you’ll have to decide how many shares you want to give to the shareholders (the owners of the company). You must issue at least one share to one shareholder, but there’s no limit to how many shares you issue or shareholders you have.

Setting up a company by yourself? As the sole shareholder, you could choose to issue just one company share. This would represent 100% ownership of the company. Likewise, if you’re forming the company with a business partner, you might issue two shares (one each) representing 50% ownership.

No matter how many shares you issue, you’ve also got to assign a nominal value to your shares which will determine your financial liability for that share. Most shares are just given a nominal value of £1. But you can assign any amount you want.

Just be aware that the bigger the value you assign to your shares, the higher your personal liability will be if the company were to incur debts.

5. Register for VAT

Value added tax (VAT) is a UK Government tax charged on most goods and services that VAT-registered businesses provide.

VAT registration is compulsory if your turnover exceeds £85,000 (2023/24 threshold) within a 12-month period. Likewise, if you’re expecting to turnover more than £85,000 within the next 30 days, or you buy more than £85,000 worth of goods from EU VAT-registered suppliers, you must register for VAT.

You can also choose to register voluntarily — no matter how much your turnover might be. If you choose voluntary VAT registration, you can reclaim VAT on goods and services you’ve bought from other businesses, and your business will be eligible for VAT refunds if you sell zero-rated products. Voluntary registration will often help boost your company’s public image, because it will make your business seem bigger and more established.

6. Set up a business bank account

If you’re registering a company, it’s imperative that you set up a business bank account.

It’s not a legal requirement to have an official business bank account — but it will draw a clear line between your company’s finances and your personal finances. This makes life a lot easier in terms of keeping track of your business finances, maintaining accurate accounting records, preparing your accounts, and more.

Setting up a business bank account for a limited company in the UK is a straightforward process, and most banks offer a range of account types to suit your needs. You’ll normally be expected to provide a copy of your incorporation documents, personal ID and proof of address for each company director to set up an account. There will usually be a credit check, too.

If you’re setting up a UK company from overseas, it’s often difficult to fulfil the residency requirements needed to set up a UK account. 1st Formations offers a solution through our partnerships with Wise and Payoneer, helping non-UK residents to get easy access to UK and international business bank accounts.

7. Understand your new filing requirements

Owning and running a company comes with responsibilities. As a limited company director, you have a legal duty to ensure your company files the necessary documentation correctly and on time. This includes:

• Filing your annual confirmation statement
• Completing and sending Company Tax Returns and accounts to HMRC
• Completing and sending annual accounts to Companies House
• Paying Corporation Tax
• Paying VAT
• Filing an annual Self Assessment tax return
• Notifying Companies House and HMRC if company details change
• Keeping statutory company registers up to date

Most of these requirements are straightforward, but in some cases, you might want help from an accountant or company secretary service that can assist you in meeting your filing obligations.

8. Don’t forget to register for Corporation Tax

When you register a company online, you’ll need to register your company for Corporation Tax within three months of starting up business activities (this includes buying or selling goods, advertising, employing people, or renting business property).

If your company does any of these things, HMRC will view your business as an “active” company for Corporation Tax purposes. That means you’ve got to submit Company Tax Returns to HMRC — even if you’ve got no tax to pay.

9. Hiring staff? Make sure to register as an employer

If your new company is going to hire staff, you’ve got to register as an employer and set up PAYE.

You can do this by creating a Government Gateway account. You’ll then need to answer a series of simple questions using an online form to register as an employer.

When your application is processed, HMRC will send you an employer reference number and a tax office reference number. You’ll need these numbers to do your company payroll and send in your PAYE submissions to HMRC.

Don’t forget: you’ve got to register as an employer before your company’s first payday. You can register up to two months in advance — but be aware that it normally takes up to five working days to get your PAYE reference number.

10. Use a company formation agent

Most of these steps are generally straightforward. But when you pile everything up and take stock of all the things you’re going to need to do and remember, it’s easy to get a bit overwhelmed. That’s why you will end up saving yourself a lot of time, money and stress by registering your company through an online company formation agent.

Companies House has authorised a number of company formation agents to file electronic incorporations — and it can make life super simple for business owners.

With a company formation agent, all you’ve got to do is fill out a quick online form. Then, your agent can double-check to make sure everything has been filled out correctly. This can prevent your application from getting rejected or delayed, saving you time.

Likewise, going for a company formation agent also saves you money. Accountants typically charge in the region of £200 to £300 to register a company. But if you choose a company formation - such as 1st Formations - you can form a company online in a matter of hours starting from only £12.99.

Ready to learn more?

Check out the 1st Formations site (and their dedicated blog) to discover everything you need to know about forming a UK limited company and how to give your business the best possible chances of success.