There are various ways contractors can set up their own limited companies; via an accountant (a popular way), via a company formations agent, or direct with Companies House.
As you can imagine, the more “middlemen” that are involved, the more you might expect to pay. Having said that, contrary to popular belief, it is surprisingly inexpensive and easy to set up a company in the UK.
1. Companies House – Web Incorporation
The standard registration fee to set up a company is just £15 for the ‘standard’ Companies House web incorporation service, and £40 if you submit a paper application (8-10 day turnaround). For a same day formation (paper return), you’ll be charged £100.
Using the web incorporation service, you will need to fill in several online forms which together make up Form IN01 (including company director details, the company’s registered address, the company’s proposed share capital, and shareholder details).
All applicants are automatically provided with the Companies House model Articles and Association (essentially a company ‘rule book’), and the Memorandum of Association is automatically created (stating that each subscriber wishes to form a company).
You can read more about the Articles & Memorandum of Association here.
2. Formations Agent
Another route is to use an intermediary to incorporate on your behalf. There are hundreds of formation services available online, from email-only services (i.e. all your company documents will be emailed to you) to more extravagant packages which even include a brass plate with your company name on it!
You simply need to search if your desired name is available, pay the fee, and everything should be taken care of on your behalf.
Search Google for “company formation” to access hundreds of formation agents.
3. Your Accountant
A large number of contractors prefer to set up a company via their accountants as this is a hassle-free process.
In many cases, your accountant may even include the incorporation costs if you sign up to their monthly service.
Other accountants will apply a one-off set up charge rather than absorbing the costs into the standard fee.
Either way, your accountant should let you know upfront how much your company incorporation will cost.
Visit our directory of contractor accountants for an initial list of service providers.