A Step-by-Step Guide: How to Set Up a Limited Company in the UK

How to Set Up a Limited Company (And Why You’ll Need One to Raise Capital)

If you’re planning to raise investment in the UK — from angels, funds, or through any of the platforms listed on ThatRound — you’ll need to be set up as a limited company first. It’s not just a legal formality: without a limited company, you can’t issue shares, and without shares, you don’t have anything to offer investors.

Here’s a founder-friendly breakdown of how to get set up:

1. Make Sure a Limited Company Is Right for You

A limited company is a separate legal entity. That means you’re not personally on the hook for business debts, but you’ll have more admin to handle than if you were a sole trader. If you’re fundraising, though, there’s no real debate — this is the structure investors expect.

2. Pick a Name

Your company name has to be unique and comply with Companies House rules. Use the Companies House Name Checker to check availability—and don’t forget to check domain names too. We recommend using GoDaddy or a similar service to see if the .com or .co.uk is free.

3. Appoint Directors (and Maybe a Company Secretary)

Every company needs at least one director. This person is legally responsible for the business, including making sure financial statements and filings are submitted on time. A company secretary isn’t required but can help with admin.

Planning to raise soon? Look into Director and Officers (D&O) Liability Insurance — it protects you personally if you’re ever sued in your role as a director. Most UK investors see this as a hygiene factor.

4. Issue Shares

You’ll need at least one shareholder to form a company. For most startups, that’s just you (or you and your co-founders). Shares are how ownership is defined — so it’s crucial you get this part right before bringing in outside capital.

5. Prep Your Docs

There are two key documents you’ll need:

• Memorandum of Association: A statement signed by all founding shareholders agreeing to form the company.
• Articles of Association: The rulebook for how your company will be run.

Standard templates are available on the Companies House website — but if you’re raising investment, consider using custom articles down the line that reflect founder-friendly terms (like pre-emption rights).

6. Register with Companies House

You can register online via the Companies House portal. It costs £50 and usually takes about 24 hours. You’ll receive a certificate of incorporation when it’s official.

7. Register for Corporation Tax

HMRC needs to know about your new company. In most cases, you’ll do this automatically when registering. If not, you’ve got 3 months to notify them separately.

8. Open a Business Bank Account

You’ll need a separate business account to keep your company’s finances clean. Most major UK banks offer accounts for limited companies, often with tools for invoicing, cash flow, and more.

9. Stay on Top of Ongoing Duties

Running a limited company comes with ongoing legal and financial responsibilities: filing annual accounts, submitting a confirmation statement, and keeping proper financial records. It’s worth bringing in an accountant early — they’ll save you time and keep you compliant.

10. Consider Using a Formation Service

If you’d rather not handle all the admin yourself, companies like 1st Formations offer packages that include name checks, document prep, and even a registered office address. It’s a quick way to get everything set up properly from day one.

11. Why Investors Care About Limited Companies

Investors need to know what they’re buying into — and a limited company gives them clarity. Shares can be issued, ownership is trackable, and everything’s governed by UK company law. It also makes due diligence, scaling, and eventual exits far simpler.

TL;DR:
If you’re gearing up to raise, setting up a limited company is your first real step. It’s not just about compliance — it’s about credibility. Done right, it sets the foundation for a scalable, investable business.