Long gone are the days when you needed an accountant, a large sum of money, and the patience of a saint to set up a company. Today, it is possible to incorporate a UK limited company for less than £12.00 using the services of an online company formation agent.
In addition to the low cost of online company formation, your new company could be incorporated and ‘ready to trade’ on the very same day. Below, we take a look at the different options available to you.
Company formation options and costs
There are three ways to set up a company in the UK, each of which carries a different price tag but all of which provide the same result – a UK company that is incorporated at Companies House under the Companies Act 2006.
You can register through:
- a company formation agent
- an accountant
- Companies House
Option 1: Set up a company online through a company formation agent
Company formation agents are approved Companies House eFiling partners, providing fast, secure, and affordable online company incorporation and filing services. Using specialist software processes, company registration agents can deliver fast-tracked online incorporation services at very competitive prices.
At Quality Company Formations, we offer a wide range of popular and specialist incorporation packages, with prices starting at £11.99 for a ready-to-trade private company limited by shares. We also provide packages for registering private companies with multiple share classes, limited by guarantee and charity companies, public limited companies (PLCs), and limited liability partnerships (LLPs).
Please see below just how much it costs to set up various UK company structures:
- Company limited by shares – basic package £11.99
- Company limited by shares – fully inclusive package (with address services) £89.99
- Company limited by shares – multiple share classes £29.99
- Company limited by shares – non-UK residents £119.99
- Company limited by guarantee – standard articles £29.99
- Company limited by guarantee – with bespoke articles £49.99
- Charity company – limited by guarantee £49.99
- Right to manage company – limited by guarantee £59.99
- Property management company – limited by shares £49.99
- Property management company – limited by guarantee £49.99
- Limited liability partnership – with partnership agreement £29.99
- Public limited company (plc) £39.99
More information on setting up the above company structures can be found on our company formation package comparison page.
In general terms, it usually takes 3 to 6 working hours for Companies House to register a new company. However, this time period is subject to the workload on the day and is by no means guaranteed. In some instances, it can take up to 24 hours, so if you are in a hurry to incorporate, we would recommend purchasing the guaranteed same-day service, which most company formation agents offer.
Quality Company Formations includes a free Pre-Submission Review to check for any mistakes or omissions, and we will rectify and re-submit your application free of charge if it is rejected for any reason. You will also benefit from free, expert help and advice for the duration of your company’s existence, in addition to being able to manage your company’s reporting and filing requirements through our free Online Company Manager.
Option 2: Incorporate through an accountant
Prior to the Internet and the emergence of company formation agents, an accountant was the standard route to incorporation. Everything was done on paper and via post, so it was very time-consuming.
Nowadays, very few people use accountants exclusively for this purpose, instead choosing the convenience, simplicity, and affordability of online company registration provided by a formation agent.
An accountant’s time is also expensive and a typical fee for company formation may be anything from £150.00 to £500.00.
Option 3: Incorporate directly with Companies House
Companies House provides online and postal incorporation services.
Online: It costs £12.00 to register a company online by completing Companies House application form IN01 using the Web Incorporation Service, with most applications processed within around 24-48 hours.
The online service can only be used to set up a private company limited by shares with model articles, which means that you cannot issue more than one class of share, use amended or bespoke articles, or register a not-for-profit company limited by guarantee.
Postal: It is also possible to complete the IN01 application form on paper and submit it by post, which costs £40.00 and takes around 8-10 days.
It is worth noting that the number of company applications rejected by Companies House, due to errors and omissions in the IN01 form, is considerably higher for postal applications, than those presented online. The official incorporation stats from Companies House show that 53% of postal applications are rejected, versus just 8% for online submissions.
Are there any additional costs?
There are no mandatory additional costs involved in setting up a company in the UK. However, there are 2 common optional extras that many people purchase.
The first is a registered office service, which allows people to protect their privacy by using an address other than their home for disclosure on the public register of companies. A registered office service typically costs £30.00 to £50.00 per year.
The second popular extra is to purchase a service address from an address provider, which again protects the individual’s privacy. This generally costs £20.00 to £30.00 per year.
The cost of using a formation agent to set up a company in the UK is very competitive. It is also an incredibly simple and quick process.
Companies House online registration services are good, but not as simple and efficient as those available from company formation agents. The application forms are more complex and time-consuming to complete, the services are more expensive, online incorporation options are limited, and more time and effort is required to rectify and resubmit rejected applications.
Submitting postal applications to Companies House can all too easily be rejected. It is also an expensive and time-consuming process, which we recommend avoiding. Finally, incorporating through an accountant is generally the most expensive option.
In conclusion, choosing to set up a company through a formation agent provides the greatest flexibility, the quickest turnaround time, and the most cost-effective solution.