How Much to Register a Company ?
Many new entrepreneurs decide to register a limited company instead of forming a limited partnership or opening a business as a sole trader. A limited company provides its shareholders with limited liability and less personal financial risk than you may have under a different business structure. A company structure also offers many tax incentives and shareholders may pay less National Insurance than they would otherwise.
Given these advantages, it is no wonder that there are more than four million registered companies in the UK today. It has been estimated that over half a million companies are registered every year in the UK alone. But what is the cost involved in registering a company? And how does one go about the process of registering a company? We take a look at how much it costs to register a company in the UK, what you need to provide and what other ongoing costs you might have to pay.
What do you need to provide to register a company?
There are a few details that you will need to get in order first before you can register a company with Companies House.
A company name
Firstly, you will need to decide on a name for your company. This name has to be registered with Companies House. It cannot be the same or too similar to an existing business name and it cannot contain any words that people may reasonably judge as offensive. Usually, a limited company name has to include the word ‘limited’.
Memorandum of Association
If you are registering your company via the post, then you will need to include a Memorandum of Association. If you are registering online, one will be automatically created for you. A Memorandum of Association is a legal document that is signed by all shareholders or guarantors involved in the company. It must state the company name, the type of business it is and its address.
Form IN01 can be obtained from Companies House and completed online or on paper. This form requires you to state that your company will abide by the terms and conditions of the Companies Act. It must also include your:
- Telephone number
- Town of birth
- National Insurance number
- Passport number
- Address or registered limited company address
Articles of Association
Articles of Association is a legal statement that details the rights and the powers of all shareholders and directors involved with the company. It is acceptable to follow the standard articles as laid out in the Companies Act 2006 or you can have a legal advisor help you draft your own.
How much does it cost to register a company yourself?
Let us now assume that you have submitted all these documents to Companies House. If you are registering a private limited company online yourself, then, at the time of writing, you can expect to pay a fee of £12. This is dependent on if your company has everything it needs to be set up right away, is limited by shares and uses the standard articles of association. The registration fee can be paid using a debit card, a credit card or via a PayPal account.
Registering a private limited company by post incurs a cost of £40 for the usual eight-to-ten-day turnaround time. If you wish to have your company approved on the same day that you submit the registration, then you will need to pay a fee of £100. These fees are, at the time of writing, the correct amounts. Fees can be paid by a cheque made out to Companies House.
How much does it cost to register a company through an accountant?
Some small business owners choose to employ the services of a professional business accountant to assist them with registering their company. An accountant can advise you on the correct way to complete all the necessary paperwork. They can also provide you with guidance about what your statutory obligations will be once your company is registered. An accountant can ensure that you manage your capital, keep your records in order and that you know when to submit any tax returns or related documents.
Often, an accountant will provide their services in helping you to set up a company for free, on the condition that you use their services exclusively on an ongoing basis. Otherwise, the cost will vary depending on the individual accountant and their levels of experience. In general, a business accountant may charge anywhere between £100 to £150 per hour for their services.
What happens after the company is registered?
After you have submitted all the paperwork and paid your fees, Companies House will then issue you with a Certificate of Incorporation. This provides you with legal proof that your company is now an entity and will contain the company name and the date of formation. This happens instantly online, although with a postal registration you will have to wait to receive it via the mail.
What other costs should you expect?
Apart from start-up costs like labour costs, advertising costs, trademarking and the cost to rent a premises, there are a few other ongoing costs associated with the registration of your company. Every year you must complete an annual Confirmation Statement and send it to Companies House. This document confirms that your company details are all up to date and no changes have been made. This costs £13 online or £40 if filing by post.
If at any time you want to change the name of your registered company, then you will need to pay an £8 fee to Companies House if you are making the change online. It costs £10 to change a company name by post.
The fee to re-register a company is currently £20 or £50 for same-day service.
At the time of writing this article, all these prices are correct and current.
Registering a company is a relatively simple and quick process, especially when it is done online. There are some costs involved, although these can be minimised if the registration process is completed online.
After you have registered a company, you will need to start keeping your tax records in proper order. Mooncard makes it simple for companies to keep track of their expenses. Every time you use your Mooncard, you can take a photo of the receipt of your purchase and send it to your accounts department or your accountant. This means that you will always have a record of expenditures that can be easily accessed.
To discover all the benefits of Mooncard, you can book a free, no-obligation demo here.
Find out more about start-up costs :