9 September 2026 · 7 min read · Bruce Thomas
Forming a company at Companies House is quick and cheap. The decisions you make while doing it — share structure, officers, year end — are harder to change later, and they shape your tax position and your paperwork for years.
Before you incorporate
- Confirm a company genuinely suits you rather than staying a sole trader
- Check the name is available and not too similar to an existing registered name
- Check the trading name against trade marks before you print anything
- Decide who the directors and shareholders will be, and in what proportions
The incorporation itself
You will need a registered office address that appears on the public record, a service address for each director, details of anyone with significant control, and your share allocation. Standard model articles are fine for most small companies; bespoke articles are worth it where there are outside investors or unequal rights.
Share structure deserves real thought. Splitting shares between spouses or business partners affects how dividends can be paid, and unpicking it later can create tax charges that a five-minute conversation beforehand would have avoided.
What you have to do in the first three months
- Register for Corporation Tax with HMRC
- Open a business bank account in the company name and keep it separate from personal money
- Register for PAYE if you will pay yourself or anyone else through payroll
- Consider whether VAT registration is required or voluntarily worthwhile
- Set up bookkeeping records from day one rather than reconstructing them later
- Check your insurance, contracts and invoices all now name the company, not you personally
The deadlines you have just taken on
A company brings a confirmation statement each year, annual accounts filed at Companies House, a Corporation Tax return, and payroll filings every time you pay yourself. None of them are difficult, but they all have penalties attached, and the penalties are automatic.
The mistakes that cost the most
- Trading through a personal bank account and mixing money
- Drawing round sums with no salary or dividend paperwork behind them
- Choosing a year end without thinking about when tax will fall due
- Assuming money in the company account is yours to spend freely
If you are incorporating an existing business
Moving from sole trader to limited company is a transfer of a business, not just a new registration. Goodwill, equipment, existing contracts and the closing accounts of the sole trade all need handling properly, and there are timing choices that affect the tax due. That one is worth a conversation before you press the button.
This article is general guidance for business owners in the UK and does not amount to advice for your particular circumstances. Tax rules change and the right answer depends on your figures — please take specific advice before acting.
