How to set up a UK company: a practical checklist for founders

Setting up a company in the UK is fast: online, it can take a day or two. Setting it up properly, so that it does not create problems six months later, takes a little more thought. This is the checklist we go through with every founder, whether they live in London or are opening their first British business from abroad.

1. Choose the right structure

For most founders the answer is a private limited company (Ltd). It separates your personal assets from the business, it is what banks, investors and clients expect, and it is relatively simple to run. Sole traders and partnerships exist, but they rarely make sense once you plan to grow, hire or bring in partners.

2. Prepare what Companies House will ask for

Companies are registered with Companies House. Before you start, have these ready:

• A company name that is available and not too similar to an existing one.
• A registered office address in the UK. It must be a real address where official letters can be received, and it will be public.
• At least one director and the details of the shareholders.
• People with significant control: anyone who owns or controls more than 25% of the company.
• A SIC code describing the business activity.
• A registered email address for official communications.

Directors and people with significant control also need to verify their identity with Companies House. Do it early, especially if they live outside the UK.

3. Register for tax

Once the company starts trading, it must register for Corporation Tax with HMRC. The main rate is 25%, with a lower rate for smaller profits. VAT registration becomes mandatory when taxable turnover passes the threshold (currently £90,000 a year), but registering earlier can make sense if your clients are VAT registered. If you pay salaries, including to yourself as a director, you will also need to set up PAYE payroll.

Figures and rules change. Always check the latest guidance on GOV.UK or with an accountant before you decide.

4. Open a business bank account

A UK business account is essential to look credible and keep finances clean. Traditional banks can take weeks, and they may ask for extra documents if directors live abroad. Digital business banks are often quicker to start with. Whatever you choose, keep company and personal money completely separate from day one.

5. Put the annual calendar in place

This is where most new companies get into trouble. Every year a UK company must:

• file annual accounts with Companies House;
• file a confirmation statement confirming its details;
• file a Corporation Tax return and pay the tax on time;
• submit VAT returns, if registered.

Late filings bring automatic penalties. Put every deadline in a shared calendar and agree from the start who is responsible for each one.

6. Think about the rest of the business

The company is only the container. Before launch, make sure you also have a clear business plan, a price list that covers all your costs, a simple brand and a way to find your first customers. These choices matter more than any form.

How Perpi can help

We help founders and small companies set up in the UK and get the first steps right: company structure, banking, accounting through our partner network, business plan and go-to-market. If you are about to start, tell us about your project.