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Sole Trader vs Limited Company: Which Should You Choose?
Sole trader vs limited company: the real differences in tax, liability, and paperwork, so you can pick the right structure for your business.
Over 1 million UK limited companies set up
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Limited Company Formation Packages
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Why Choose Us?
We are an award-winning company formation agent who’ve formed over 1 million UK companies since 2002.
As a MadeSimple customer, you can take advantage of the simplest company formation process, free 24/7 support, and honest, upfront pricing.
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We're Trusted
More than 1 million companies formed. Rated “Excellent” on Trustpilot.
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Unmatched Experience
With 20+ years of experience, we know what it takes to get your business set up smoothly and quickly.
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Great Value
Value-packed packages start from £104.99, including the £100 Companies House fee, No hidden costs.
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24/7 Support
We're always here for you. Call, email or use online chat whenever it suits you.
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Effortlessly manage your company with our support.
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Registered Office
Want to protect your personal address from being listed on the public register? We can offer privacy and protection with a registered office address.
Mail Forwarding
Reduce junk mail and rental costs with our mail forwarding solutions, allowing us to manage your mail for more efficient and seamless operations.
Meeting Rooms
Need a meeting room by the hour? You can book high-quality meeting rooms with us, making an impression on both existing and potential clients.
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Dormant Company Accounts
Never miss a deadline when preparing and filing dormant company accounts - with no need for an accountant.
Confirmation Statement
Maintain compliance with Companies House requirements, ensuring that your confirmation statement is always sent on time.
Company Secretarial Service
Require administrative assistance? We can help ensure that company records are up-to-date and accurate.
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Registered Office
Want to protect your personal address from being listed on the public register? We can offer privacy and protection with a registered office address.
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Mail Forwarding
Reduce junk mail and rental costs with our mail forwarding solutions, allowing us to manage your mail for more efficient and seamless operations.
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Meeting Rooms
Need a meeting room by the hour? You can book high-quality meeting rooms with us, making an impression on both existing and potential clients.
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Dormant Company Accounts
Never miss a deadline when preparing and filing dormant company accounts - with no need for an accountant.
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Confirmation Statement
Maintain compliance with Companies House requirements, ensuring that your confirmation statement is always sent on time.
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Company Secretarial Service
Require administrative assistance? We can help ensure that company records are up-to-date and accurate.
Opening a Limited Company with Companies MadeSimple
Here at Companies MadeSimple, you can easily set up a limited company online via one of our many packages. With our experts by your side, we can ensure that the registration process is seamless and efficient. Set up a new company without a hassle with Companies MadeSimple and purchase a package that is tailored to your needs.
How to Form a Limited Company
When you choose to create a limited company with us, you can register and have your company incorporated in as little as 3 hours* (processing time can vary depending on Companies House workload and excludes bank holidays and weekends). In fact, all it takes is 4 simple steps to register your company online with Companies MadeSimple.
- Search - use our name availability tool to check whether your company name is available for use
- Select - choose one of our company formation packages listed above (there are also options for add-ons)
- Buy - purchase your chosen package to begin the application process
- Complete - fill out the company formation application online
After submitting your application, it will automatically be sent to Companies House for processing. An ID check will be required as part of Anti-Money Laundering and Know Your Customer regulations.
If you are interested in same-day incorporations, click here for more information about our Same Day guarantee (add-on).
*Registrations submitted on bank holidays and weekends will be processed the next working day subject to Companies House workload and successful application.
What you need to complete the company formation process
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Company Name Checker
Our company name search tool lets you instantly check the availability of your preferred company name. Just enter your desired name, and we'll let you know if it's available!
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Registered Office
Protect your personal address from being listed on the Companies House public register with our Central London registered company address. Directors Service Address included.
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Company Officers
The details of all your company's officers (directors and secretaries) and shareholders, including full name, proof of ID, occupation and address.
Our Frequently Asked Questions
On the right, you will find the answers to some of the most frequently asked questions.
If you still can't find the answer to your question, why not try our virtual assistant?
Here at Companies MadeSimple, you can easily set up a limited company online via one of our many packages. With our experts by your side, we can ensure that the registration process is seamless and efficient. Set up a new company without a hassle with Companies MadeSimple and purchase a package that is tailored to your needs.
We are an award-winning company formation agent who’ve formed over 1 million UK companies since 2002.
As a MadeSimple customer, you can take advantage of the simplest company formation process, free 24/7 support, and honest, upfront pricing.
There are several types of limited company structures in the UK, the most common being Limited by Shares.
We offer the following to cater to your formation needs:
Limited by Shares packages - The most common type of limited company in the UK, often used by small to medium-sized businesses.
Limited by Guarantee packages - A company without shareholders, commonly used by non-profits, charities, or social enterprises.
Limited Liability Partnership packages - A hybrid structure combining features of a partnership and a limited company.
Non-UK Residents package - A limited by shares structure with dedicated offerings for overseas residents.
Reserve a Company Name service - Service to protect your company name from being taken but intend to stay dormant for a while.
Shelf Companies - Ready made companies ready that have been open a while and are ready to begin trading with.
Key Factors to Consider When Choosing a Limited Company Type:
- Liability: Decide how much personal financial risk you're willing to take.
- Ownership Structure: Determine whether you want shareholders, guarantors, or members.
- Profit Use: Consider if profits will be distributed, reinvested, or used for public good.
- Size and Growth: Choose a structure that suits your current size and future goals.
Each type of limited company has distinct features, so select one that aligns with your business’s goals, size, and purpose.
A company Limited by Shares is the most popular type of limited company. They are owned by shareholders and have liability based on the value of the shares issued in the company; personal assets are kept completely separate to any company debts.
Limited by Shares companies are generally profit driven businesses and will have the suffix LIMITED or LTD at the end of their company name.
A full guide to companies Limited by Shares can be found here.
The most common company structure for UK businesses are companies Limited by Shares. Most "for-profit" businesses in the UK are setup with this structure.
This structure is popular because it offers:
Limited liability: The company is legally separate from its owners, so they are not personally liable for the company's debts
Flexibility: The ownership structure can be changed.
There are many benefits to forming a limited company, the main reason would be to provide protection on your personal assets and finances as they are kept separate to the company's assets and debts as the limited company would have limited liability.
Other benefits include increased tax efficiency, increased credibility as a professional and easier access to funders whilst appearing more favourable with lenders.
You can form a UK Limited company, even if you do not live in the UK or if you're a non-UK national. The director and shareholders can be of any nationality and live anywhere in the world.
A UK limited company must have a UK registered office address. Companies MadeSimple provides numerous packages that can help you get started.
Our International Package is the ideal solution for overseas customers looking to form a UK Limited company. It includes the option to use our address as the company's registered office, plus you can also open a Wise borderless account.
There is no legal obligation for a limited company to open a business bank account but it is highly recommended for some of the following reasons;
Legal and Financial Clarity: A limited company is a separate legal entity, meaning its finances must be kept distinct from your personal finances. A business bank account makes this separation clear.
Ease of Accounting: Keeping company income and expenses separate simplifies bookkeeping and filing annual accounts with HMRC and Companies House.
Professionalism: Using a business account for transactions gives a more professional impression to clients and partners.
Tax Compliance: Mixing personal and business finances can complicate your tax reporting and increase the risk of errors or scrutiny from HMRC.
Choosing a company name
When choosing your company name, you want to make sure the company name is not too similar to another whilst also remaining professional and avoiding any offensive terms. Check that your company name does not infringe upon any existing trademarks and if it includes any sensitive words, ensure that you obtain any required supporting documents and upload them to your application.
Tools to help with the above criteria:
Companies House name availability checker
Intellectual Property Office (IPO) trademark search tool
Sensitive Word List (Annex A, B and C)
Limited or LTD
Your name must end with "Limited" or "Ltd" (or their Welsh equivalents) unless you're registering as a charity or certain other organisations.
Registering a company name
You’ll officially register your company name as part of the incorporation process with Companies House. We can help you with that, Register today!
Other helpful articles for choosing the right company name.
Tips for Choosing the Right Name
Choosing a Company Name
Reserve A Company Name Service
When forming a private limited company in the UK, you will need to have the following:
- A unique company name that is available to register at Companies House
- A UK registered office address. Most of Companies MadeSimple formation packages includes this service to help protect your home address from appearing online.
- Details of all the officers of your company (e.g. Directors and Shareholders). Full names, Addresses, date of births, nationalities are all example of the type of information you will be required to know.
Having this information prepared in advance will streamline the company formation process. For more information as to what is required please see:
What Details do I Need to Form a Limited Company? (Limited by Shares)
It can generally take up to 24 hours to form a limited company at Companies House whether done through our portal or directly through the registrar. This can sometimes be longer as it is subject to their workload and whether there are any sensitive words in your company name or other areas to investigate further.
Companies Made Simple offer a "registration review" product to help minimise the risk of rejection and to help speed the process up for formation of your company.
You can start trading with your new UK limited company as soon as it is officially incorporated, meaning Companies House has approved your application and issued a Certificate of Incorporation. This confirms that your company is legally registered and ready to operate.
You may need to consider opening a business bank account, registering for corporation tax, VAT and PAYE registration amongst others before trading and suggest speaking to a business advisor if unsure how to proceed.
Companies MadeSimple is committed to ensuring payments are secure and can be made with ease, we currently accept all major credit and debit cards (including American Express, Mastercard, Visa and Maestro) and can also take renewable service payments via Direct Debit for extra security.
There are no additional costs required on top of the cost of the formation packages that is required in order to form your limited company.
Some packages may have annual (or monthly) renewal costs but these costs will be presented prior to money being charged and sufficient time will be provided to cancel or change the services if required.
Any queries about associated costs with any of our services, please contact Customers Services on 0207 608 5500 or email at [email protected].
Yes, every UK limited company is legally required to appoint at least one director. The director must be a real person (not a company) and at least 16 years old. They are responsible for managing the company and ensuring it complies with its legal obligations, such as filing accounts and annual confirmation statements with Companies House.
If desired, you can also appoint additional directors or corporate directors (other companies), but the minimum requirement of one human director must still be met.
A limited company must issue a minimum of one share. If there is more than one shareholder, at least one share must be issued to each shareholder. However, many companies choose to issue more than the minimum number of shares, such as 100 or 1,000, as this provides greater flexibility for dividing ownership or allocating additional shares in the future without needing to issue new ones.
Yes, you can register a UK limited company on your own. A UK limited company can be set up with just one person who acts as both the sole director (runs the business) and the sole shareholder (owns the business).
This answer represents the majority of limited company formations in the UK with a Limited by Shares structure.
UK company officers will be required to provide 2 addresses to Companies House upon forming a limited company. They must provide a residential address and a correspondence/ service address. The residential address will not appear on the public register at Companies House, the correspondence/ service address however will so unless the home address is used as the service address of the officer, this will not appear online.
Companies MadeSimple offers a service address service within its Registered Office product to allow officers to use our prestigious address to appear online and protect their privacy. We offer this service within the majority of our formation packages.
When your UK limited company has been successfully incorporated, the following documents will be obtained.
- Certificate of Incorporation
- Share Certificates (If applicable)
- Memorandum and Articles of Association
- Company Web-filing Authentication Code
We offer packages that may include other documents such as registers or meeting minutes but the above documents will be available with every formation.
UK limited companies are required to complete several annual filings to remain compliant including a Confirmation Statement (CS01), Annual Accounts and Corporation Tax Return (CT600). It is important to file these on time in order to avoid fines and to avoid Companies House removing the company from the public register.
Companies MadeSimple offer lifetime support for businesses registering through our platform; we offer a team of expert formation agents and customer service personnel that will always do whatever they can to assist you in your queries, concerns and journey. We offer support via phone, email, online chat and a wide array of help articles, available 24/7!
Companies MadeSimple is proud of our company secretarial (CoSec) platform which allows full management of your company/ies directly through your account with us. File information directly to Companies House through your account with MadeSimple, sort your companies by filing due dates, import companies, make changes and download or upload documents.
The best part is, we are always looking to improve and add more user-friendly features to help boost efficiency and experience to your company management journeys.