Thinking about setting up a limited company? You may be surprised to learn that you can actually incorporate a new company for less than £20. In this article we’ll take you through various incorporation costs, depending on the services that you choose, as well as any additional costs that you might incur during the process.
Costs of company formation
The perception of forming a company is largely that it is overly time-consuming and expensive, however this is simply not the case. Yes, running a limited company involves more administration when compared to operating as a sole trader, however with the right guidance and support, it’s certainly not a heavy task.
Setting up a company – Companies House
The most cost-effective way to form a company is to deal with Companies House directly. If done online using the WebFiling service, it costs just £15 to incorporate a company via this method (£40 via post). This is a basic but effective service, so if you’re needing additional support / services, you may wish to discuss with an accountant or formations agent.
Setting up a company – using an intermediary
The alternative option is to use a formations agent. In the UK, there are hundreds of organisations which offer this service, and it will cost you between £50 – £100 (sometimes more). Some formations agents will offer this service at a loss, providing you take up their offer of another service or sign up for a bank account for example. We recommend that you keep these as separate processes however, in order to get the best deal.
An accountancy firm may form the company on your behalf for free, again providing that you use their accounting services.
There are some compulsory ongoing costs that you should be aware of, as well as additional, fee-incurring services, discussed below.
Every company must submit an Annual Return (form AR01), on the anniversary of its incorporation. This will provide Companies House an overview of the company and its directors and shareholders. Again, the cost for this is minimal if done online – just £13 versus £40 if done via post.
Changing your company name will cost £30 (online) or £50 (via post).
In addition to this, every company will have additional admin costs, for example accountancy fees, or even penalties for late submission of forms.
As always, if you wish to discuss any of the above, please feel free to get in touch with Mark at any time on 01259 721156 or email firstname.lastname@example.org.