How much does it cost to set up a limited company?

When thinking about starting a limited company, one of the first questions is straightforward: how much will it actually cost to set up? You may have heard that the Companies House fee is relatively low, but it can be harder to understand the wider costs involved and how different routes compare.

In this blog, we examine the actual costs associated with forming a UK limited company through Companies House, a company formation agent, an accountant, or a solicitor. We also explore ongoing expenses, such as confirmation statements, address services, and basic compliance, so you can build a realistic budget before you make the move from planning to incorporation.

If you want to compare real formation packages as you read, you can visit the 1st Formations’ package comparison page and review our limited company formation options.

Option 1: Registering directly with Companies House

Registering directly is the “DIY” route. You complete the application yourself on the gov.uk website and pay the £100 digital fee.

What you pay

• £100 for standard digital incorporation
• £156 if you choose the same-day digital service
• £124 if you file by post using paper forms

What you get for that fee

When you register directly with Companies House, you receive:

• A Certificate of Incorporation (proof your company legally exists)
• Automatic or later registration route for Corporation Tax with HMRC
• Your company added to the public register

That’s the core legal requirement done. However, this route does not include:

• Help choosing the right company structure or share setup
• Tailored memorandum and articles of association (you’ll use the Model articles by default unless you upload your own)
• Share certificates, statutory registers, or any template documents
• Address services such as a registered office or directors’ service address
• Ongoing reminders or company secretarial support

If you’re considering the DIY route, it’s worth reading 1st Formations’ blogs on how to register a company in 4 simple steps and 15 reasons why company formations are rejected to make sure you understand every step before you start.

Who this route suits

DIY registration can work if you:

• Are comfortable reading guidance and completing forms accurately
• Have a straightforward ownership structure
• Are happy to organise your own documents and compliance

For many first-time founders, the risk is simply not knowing what you don’t know. Mistakes with share structure or company type can be expensive to correct later, which is why a lot of new founders choose a company formation agent instead.

Option 2: Setting up a limited company using a formation agent

Company formation agents sit between you and Companies House. They use specialist software to file your application, bundle in documentation, and often provide ongoing support, address and compliance services.

Typical cost of using a formation agent

Entry-level packages for a private company limited by shares typically start from around £2.99 rising to £99 (excluding £100 Companies House fee) for packages that include additional services.

For example (prices ex. VAT):

• Basic digital formation packages often start from £2.99 (excluding the £100 Companies House fee).
• More comprehensive packages (e.g. including address services and company secretarial support) are commonly in the £17.99 to £39.99+ range.

At 1st Formations, for instance, the Digital Package starts from £2.99 (excluding the £100 Companies House fee) and includes company documents, company registers and filing of the first confirmation statement, with higher-tier packages adding address services and ongoing compliance support.

You can compare these options on the 1st Formations homepage to see which set of features fits your budget and needs.

What you get for that fee

Although exact inclusions vary by provider and package, formation agents’ basic packages typically provide:

• Companies House incorporation (digital filing)
• Certificate of Incorporation
• Memorandum & articles of association
• Share certificates and initial statutory registers
• Pre-submission data checks and error reduction

Optional extras often include:

• Registered office address
• Directors’ service address
• Business address and mail forwarding
• Assistance with opening a business bank account
• Help registering for VAT, PAYE, or the Information Commissioner’s Office (ICO)

Why many founders choose an agent

Using a specialist agent is usually only slightly more expensive than going direct, but it includes:

• Much more support and guidance, especially for first-time founders
• Documents and registers that Companies House does not provide by default
• Optional ongoing services to keep you compliant

In practice, it’s often the best value option for someone starting their first limited company and wanting it done correctly without paying accountant or solicitor fees.

Option 3: Forming a company through an accountant

Some accountants will offer to “take care of the company formation” for you, often bundled with their monthly accounting fees.

Typical accountant costs

There are two main models:

• Free or discounted incorporation when you sign up to a monthly accounting package (e.g. £70 to £150+ per month, depending on the level of service).
• A one-off incorporation fee, which can range from around £350 to £500+, sometimes more for more detailed advice or complex set-ups.

Crucially, in many cases accountants don’t actually file incorporations themselves, they outsource to a formation agent and add their own margin, so you can end up paying several times the base cost you would have paid by going to an agent directly.

Pros and cons of using an accountant for formation

Pros

• You may already be planning to use an accountant for bookkeeping and year-end accounts.
• They can advise on tax planning and the pros and cons of switching from sole trader to limited company.

Cons

• Formation is not their core specialism.
• You’ll likely pay more for the same incorporation work that agents perform every day.
• Ongoing changes (adding directors, issuing new shares) may attract high hourly fees.

For most straightforward startups, it’s usually more cost-effective to:

1. Use a formation agent to set up the company correctly, and
2. Bring in an accountant later for ongoing tax and accounting support once you’re trading.

Option 4: Forming a company through a solicitor

Solicitors are invaluable for complex legal work, but they are rarely the cheapest or most efficient option for basic company formation.

Typical solicitor costs

Where solicitors handle the formation, it often sits within a broader legal package (e.g. bespoke shareholder agreements, tailored articles of association, investment documentation).

It’s common to see costs starting at £500+ for even relatively simple incorporations when a solicitor is involved, and much more for complex funding or multi-shareholder structures.

Like accountants, many law firms still use formation agents in the background and add their own fee on top.

When might a solicitor be worth the cost?

A solicitor can be valuable if:

• You need bespoke shareholder or partnership agreements
• You’re issuing different classes of shares or planning future investment rounds
• You need advice on intellectual property or trademarks as part of your structure

Even in those situations, you can often:

• Use a formation agent to incorporate the company, and
• Ask a solicitor to draft or review only the specific legal documents you need, and so reducing the cost.

For typical small businesses and side-hustles becoming limited, a solicitor is usually optional rather than essential.

One-off vs ongoing costs: the full picture

The Companies House fee (whether you pay it directly or via an agent) is just the start. To get a realistic view of affordability, you should also factor in:

Confirmation statement filing fee

Companies House charges £50 for the digital confirmation statement filing fee.

Many founders choose to let a formation agent or company secretarial service handle confirmation statements for an additional fee. 1st Formations’ Confirmation Statement Service, at a cost of £75.99 (including filing fee), is designed to help with exactly this.

Address services

If you don’t want your home address on the public register, you’ll likely need:

• A registered office address service
• A directors’ service address

Formation agents typically charge annual fees for these (for example, a registered office might cost around £39 per year, and a service address around £26 per year, plus VAT).

You can learn more about these options on our Registered Office Address and Service Address product pages.

Banking, insurance and software

You should also budget for:

• A business bank account – some are free; others charge a small monthly fee (often £5 to £10+) depending on the provider and features.
• Accounting software – many small businesses pay for cloud bookkeeping tools.
• Insurance – employer’s liability (if you hire staff) and, commonly, public liability or professional indemnity. Costs vary widely but can start from just a few pounds per month for simple setups.

For more on business insurance, the GOV.UK and MoneyHelper websites provide neutral, up-to-date guidance.

Accounting and compliance support

Once you’re trading, you’ll face:

• Annual accounts and Corporation Tax returns
• Confirmation statements
• Payroll (if you pay yourself a salary or employ staff)
• VAT returns (if registered)

Some founders handle these themselves, but many choose an accountant or all-in-one accounting service, typically paying a monthly retainer of around £150+ per month.

Company formation comparison: what will you actually spend?

Here’s a simple at-a-glance comparison for a straightforward private company limited by shares formation.

For most UK startups, side-hustles, and sole traders going limited, the company formation agent route offers the best balance of cost, support, and long-term flexibility.

So, how much should you budget overall?

If you’re forming a simple, small limited company, a realistic minimum upfront budget might look like this:

• £100 to £200 – One off company formation, via Companies House or formation agent, including filing fee
• £65/year – Optional statutory address services
• £0 to £15/month – Basic business bank account (some are free)
• £0 to £20/month – Entry-level accounting software
• £0 to £50/month – Insurance (depending on your activities and cover level)
• £50 to £76/year – annual confirmation statement filing
• £70 to £150/month – Accountancy service including annual accounts, Corporation tax return, PAYE and VAT

If you add professional address services or more comprehensive support, your first-year cost will increase, but so will your privacy and level of comfort.

The core message: for most founders, setting up the limited company itself is inexpensive; it’s the wider running costs you need to plan for carefully.

If you’re ready to move from research into action, you can start your application in minutes via the 1st Formations, or browse more guidance in our blog section on Start a Business.