Starting a limited company in the UK is a popular choice for entrepreneurs due to benefits such as limited liability, tax efficiencies, and a professional business image. However, it is important to understand the costs involved in the incorporation process and initial compliance obligations to plan effectively.
1. Companies House Registration Fees
The first cost when forming a limited company is the registration fee with Companies House.
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Online Registration: £12 – The fastest method, typically processed within 24 hours.
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Postal Registration: £40 – Slightly slower and requires submitting Form IN01 by post.
This fee covers the official incorporation and issuance of your Certificate of Incorporation, confirming your company legally exists.
2. Company Formation Services
Many business owners use third-party formation agents for guidance and convenience. These services typically offer:
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Company name checks and reservations
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Registered office address services
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Preparation of the memorandum and articles of association
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Assistance with director and shareholder registration
Cost Range: £20–£100 depending on the level of service and extras included.
3. Registered Office Address
Every limited company must have a registered office address in the UK, which is publicly listed at Companies House. Options include:
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Using your home address: Free, but may raise privacy concerns.
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Using a virtual office or professional service address: £50–£200 per year.
4. Business Bank Account
Although not a legal requirement, most limited companies open a business bank account. Banks may charge:
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Setup fees: £0–£50
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Monthly account fees: £0–£20
5. Accountant or Bookkeeping Services
To comply with accounting and tax obligations, including Confirmation Statement Filing and annual accounts, many companies hire accountants or use bookkeeping services.
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Cost Range: £100–£500 per year for basic services.
6. Optional Costs
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Domain name and website setup: £10–£100 per year
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Business insurance: £100–£500 depending on coverage
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Legal advice or contracts: Varies depending on complexity
Summary of Typical Initial Costs
| Expense | Cost Range |
|---|---|
| Companies House registration | £12–£40 |
| Formation agent services | £20–£100 |
| Registered office address | £0–£200/year |
| Accountant/bookkeeping | £100–£500/year |
| Business bank account | £0–£50 setup + £0–£20/month |
| Optional (insurance, domain) | £10–£500 |
Final Thoughts
Setting up a limited company in the UK is relatively affordable, but costs vary depending on the services you choose. Beyond incorporation, ongoing compliance, such as Confirmation Statement Filing Services, annual accounts, and proper record-keeping, should also be considered when budgeting. Planning ahead ensures your company starts on a strong legal and financial foundation.
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