A No-Nonsense Guide to Company Formation

Thinking of starting a business? Whether it’s a fresh idea or part of something bigger, getting the setup right from the start isn’t just good practice — it’s essential. Done well, it sets you up to grow, protects you personally, and helps you make smarter decisions from day one.

This is a straightforward, jargon-free guide to company formation — what it means, what to expect, and how to do it in a way that actually works for you.

So What Is Company Formation?

Company formation is the process of legally setting up a new business as its own standalone entity. Once you incorporate, your company becomes legally separate from you. That matters because:

  • You’re no longer personally liable for business debts
  • You can take advantage of different tax routes
  • You look more credible to banks, investors, and clients

It’s a bit like giving your business its own passport, bank account, and identity — and it’s often the moment when things get real.

What You’ll Need to Do (Step-by-Step)

Here’s how company formation works, in real-world terms:

1. Pick the structure that suits you

This is the foundation — how your business is set up legally, financially and operationally. You’ve got a few options:

  • Sole Trader – fast, low-cost, but you’re personally liable for any losses
  • Limited Company (Ltd) – gives you limited liability, tax flexibility, and more options to grow
  • LLP – great for partnerships needing protection and flexibility
  • PLC – more complex, but ideal if you want to raise serious funding from the public

If you’re not sure which is right, we help people work this out every week — feel free to get in touch.

2. Choose a business name

Sounds simple, but there are rules. Your name needs to be:

  • Unique (you can check via Companies House)
  • Not misleading or offensive
  • Not too similar to existing companies

It also needs to reflect what you do — and ideally, be easy to remember. Think long-term branding, not just what sounds cool today.

3. Set your registered office address

Every UK company needs one. This is where HMRC and Companies House send your official post.

  • It has to be a real UK address (not a PO Box)
  • It’s public, so privacy matters — lots of our clients use our address and we forward the good stuff on

4. Appoint directors and shareholders

  • Directors run the company and are legally responsible for filing and reporting
  • Shareholders own the company. You only need one (and it can be the same person as the director)

If you’ve got more than one, you’ll also want a clear shareholder agreement — which we can help you build.

5. Sort your incorporation documents

This includes:

  • Memorandum of Association – confirms your intention to form a company
  • Articles of Association – outlines how your company will operate day-to-day

These documents matter more than people think. They affect everything from ownership disputes to raising future investment.

6. Open a business bank account

Separate business and personal finances. It keeps things clean and helps with:

  • Cashflow clarity
  • Tax return accuracy
  • Looking professional from the off

We help clients get set up with traditional and online-first banks — depending on what suits their business best.

7. Register with HMRC

After you form your company, you’ll need to register for:

  • Corporation Tax within 3 months
  • VAT (if your turnover goes above £90,000 — or sooner if you want to reclaim VAT)
  • PAYE if you’re hiring staff or paying yourself a salary

All this sounds dry, but getting it wrong can lead to fines, or worse, cashflow chaos. That’s where good support comes in.

What You’ll Gain from Incorporating

Incorporating isn’t just about ticking legal boxes — it opens up a new level of opportunity. Here’s what you really get:

✅ Personal Protection

You’re not on the hook for business losses. This is huge — especially in industries with big start-up costs or delivery risks.

✅ Tax Flexibility

You can pay yourself via dividends, retain profits in the business, and often pay less than if you were self-employed. We help clients design smart, tax-efficient strategies from day one.

✅ Credibility & Trust

It signals to clients, suppliers, and funders that you’re serious. It’s also often a requirement for tenders, partnerships, and grant schemes.

✅ Room to Grow

Want to take on a co-founder? Bring in investors? Open new locations? Sell shares to fund growth? You’ll need a formal structure for that — and incorporation gives it to you.

What We Wish More Startups Knew

Company formation is just the beginning. Once you’re up and running, here’s what sets the best businesses apart:

  • Bookkeeping from day one – avoid the year-end panic
  • Cashflow planning – knowing your numbers = making better decisions
  • Tax forecasting – we help clients reduce their corporation tax bills by thousands
  • Strategic advice – we’re more than number crunchers. We help people build businesses that actually work for them

Why Work With a Team (Like Ours)?

We’re not just form-fillers. We’re your sounding board, finance team, and growth partners.

  • We make the setup stress-free
  • We flag the things you haven’t thought of yet
  • We build your business with the future in mind — not just the paperwork

If you’re serious about building something that lasts, having the right setup — and the right support — makes a massive difference.

Ready to start your business the right way?

If you want to:

  • Talk through which structure works best
  • Get help with the setup (and all the legal bits)
  • Start strong with finance systems, tax planning, and proper advice

Just shout. We’d love to help make it happen — and make it feel way less overwhelming.