Setting up a Limited company online

Adalberto P · Mar 20, 2021

I am going to set up a Limited Company for myself, as a sole owner. An accountant quoted me a good amount of money to do it. I have seen a number of online companies who say they help you do it for a fixed fee depending on the 'package' you buy. The can charge form only £12 to £200.

I have even found some of these companies in the TrustPilot reviews with several reviews. I do not want to put the names here in case I am accused of promoting companies but, if somebody tells me it is OK to do so, I can mention them.

Are they reliable or just cowboys looking for easy money?

Has anybody here used them?

Recommendations/referrals welcome

Thanks

Nico Albrecht · Mar 20, 2021

Why not do it for yourself online and pay the £12 yourself.

You can pay an account to do it and ask questions or do it yourself.

You should know filing annual accounts cost money too for a limited company , and you will need most likely an account and doing it for you. From £500 to several thousands a year depending how complex it is. Your biggest challenge will be to get a decent business account with one of the main banks.

Mark T Jones · Mar 20, 2021

As above serving up a company yourself is easy and cheap

It's after that the costs start creeping in

It would be a great idea to go back to some of these companies and ask what it us they are actually offering for the money and then decide what you want

Adalberto P · Mar 20, 2021

Nico Albrecht said:
Why not do it for yourself online and pay the £12 yourself.

You can pay an account to do it and ask questions or do it yourself.

You should know filing annual accounts cost money too for a limited company , and you will need most likely an account and doing it for you. From £500 to several thousands a year depending how complex it is. Your biggest challenge will be to get a decent business account with one of the main banks.

Yes, I know about the costs but my registration will also be to reduce my income tax and for other reasons (to protect my money by investing it in the company).
I know I could do it myself but I find the documentation confusing.
Also, even if I use an online company to do the registration, I will still get an accountant to do the accounts.

Adalberto P · Mar 20, 2021

Mark T Jones said:
As above serving up a company yourself is easy and cheap

It's after that the costs start creeping in

It would be a great idea to go back to some of these companies and ask what it us they are actually offering for the money and then decide what you want

Actually, one of the things those online registration companies offer is getting a business bank account. That is why I am asking people here if anybody has used them to register their company.

intheTRADE · Mar 20, 2021

I would recommend Rapid Formations. Great company who I have used a few times

KM-Tiger · Mar 20, 2021

Year ago now but I used Quick Formations to register my Ltd. As long as your requirements are simple, then DIY with one of the online services is the way to go.

Interestingly, Quick Formations was set up by @Ozzy who now owns this forum.

Mr D · Mar 20, 2021

Adalberto P said:
Yes, I know about the costs but my registration will also be to reduce my income tax and for other reasons (to protect my money by investing it in the company).
I know I could do it myself but I find the documentation confusing.
Also, even if I use an online company to do the registration, I will still get an accountant to do the accounts.

Then just get a cheap filing done - for £12 or £200 your end result is a company. Oh they may chuck things in that sound nice but never get used..... company seal, some letterheads etc.

It really is quick and easy to set up a company.

japancool · Mar 20, 2021

I used Companies Made Easy.

japancool · Mar 20, 2021

Adalberto P said:
Actually, one of the things those online registration companies offer is getting a business bank account. That is why I am asking people here if anybody has used them to register their company.

They don't offer "getting a business account". They just refer you to a bank and you still have to go through the bank's usual process. It's no easier than approaching the bank directly.

Adalberto P · Mar 20, 2021

Adalberto P said:
I am going to set up a Limited Company for myself, as a sole owner. An accountant quoted me a good amount of money to do it. I have seen a number of online companies who say they help you do it for a fixed fee depending on the 'package' you buy. The can charge form only £12 to £200.

I have even found some of these companies in the TrustPilot reviews with several reviews. I do not want to put the names here in case I am accused of promoting companies but, if somebody tells me it is OK to do so, I can mention them.

Are they reliable or just cowboys looking for easy money?

Has anybody here used them?

Recommendations/referrals welcome

Thanks

Another associated question?
What is the best method to invest your personal money in your company? Can it/should it be made 'official' with the Companies House? I think it lists your capital as you start it or is it after you submit the first accounts?
Or is it done with a solicitor?
Thanks

Mr D · Mar 20, 2021

Adalberto P said:
Another associated question?
What is the best method to invest your personal money in your company? Can it/should it be made 'official' with the Companies House? I think it lists your capital as you start it or is it after you submit the first accounts?
Or is it done with a solicitor?
Thanks

Enter it as directors loan account money owed to you.
Then take it out later without it being subject to tax.

Adalberto P · Mar 20, 2021

Mr D said:
Enter it as directors loan account money owed to you.
Then take it out later without it being subject to tax.

What is the formal way to do it so that it is documented?....lest they think it is profits

KM-Tiger · Mar 20, 2021

Adalberto P said:
What is the formal way to do it so that it is documented?....lest they think it is profits

Just record it in your books as a loan. It's a balance sheet item so doesn't appear on the P/L account.

Adalberto P · Mar 20, 2021

Adalberto P said:
I am going to set up a Limited Company for myself, as a sole owner. An accountant quoted me a good amount of money to do it. I have seen a number of online companies who say they help you do it for a fixed fee depending on the 'package' you buy. The can charge form only £12 to £200.

I have even found some of these companies in the TrustPilot reviews with several reviews. I do not want to put the names here in case I am accused of promoting companies but, if somebody tells me it is OK to do so, I can mention them.

Are they reliable or just cowboys looking for easy money?

Has anybody here used them?

Recommendations/referrals welcome

Thanks

Will the PAYE for me be a separate thing with HMRC, have the Companies House got anything to do with it?

Mr D · Mar 20, 2021

Adalberto P said:
Will the PAYE for me be a separate thing with HMRC, have the Companies House got anything to do with it?

No, thats between the company and HMRC.
Companies house get involved in the company things, HMRC get involved in the tax things.

Mark T Jones · Mar 20, 2021

Adalberto P said:
Will the PAYE for me be a separate thing with HMRC, have the Companies House got anything to do with it?

No but you definitely need dedicated professional advice

Ozzy · Mar 21, 2021

Adalberto P said:
Will the PAYE for me be a separate thing with HMRC, have the Companies House got anything to do with it?

This is where you need an accountant. It's fine to look after these things yourself if you understand the principles, but if you don't (and most people don't) then I would strongly recommend you use an accountant to get your accounts setup. A good accountant would help you setup something like Xero, Freeagent or whatever so you can get up and running on your own accounts - showing you what to do on a monthly basis. Then when it comes to the year end their fees will be fair and they only need a quick tap and knock, and your accounts are filed at Companies House and HMRC with ease.

As a very general piece of advice, you actually won't have any pay for a while from your new company.
You put a loan into the company, lets say for easy math you invest £12,000 into the company as a loan. That gets recorded on your Balance Sheet as a debt the company owes, as mentioned earlier. As far as Companies House would be concerned, should you file your accounts with them in that time, it would be a debt.
You then take out of the company £1,000 a month to live on. This would not be wages, it would be the company paying you back £1k a month of that loan for 1 year.
As far as the tax is concerned there is no PAYE because you haven't had any pay from the company, you've earned nothing to put it another way. However the company has gradually been repaying it's loan to you - and you have been using those repayments to put food on the table and live on.

I'm perhaps oversimplifying it there, but that's a summary of a tax efficient way to invest into a company if any of that investment is needed to "pay" you too.

As for using an online company formation service to setup your company, almost all the ones you will find online are powered by the software my day job creates for that industry. I'm bias but our software is easier to use and less complicated that the Governments own platform and the cost between them all us comparable, even Quick Formations mentioned earlier that I sold in 2014 still runs on our eFiling platform. You're no better or worse of using a formation agent website or doing it on the gov.uk website yourself at a basic level, I just think the formation agents website would be easier to use.

Adalberto P · Mar 21, 2021

Ozzy said:
This is where you need an accountant. It's fine to look after these things yourself if you understand the principles, but if you don't (and most people don't) then I would strongly recommend you use an accountant to get your accounts setup. A good accountant would help you setup something like Xero, Freeagent or whatever so you can get up and running on your own accounts - showing you what to do on a monthly basis. Then when it comes to the year end their fees will be fair and they only need a quick tap and knock, and your accounts are filed at Companies House and HMRC with ease.

As a very general piece of advice, you actually won't have any pay for a while from your new company.
You put a loan into the company, lets say for easy math you invest £12,000 into the company as a loan. That gets recorded on your Balance Sheet as a debt the company owes, as mentioned earlier. As far as Companies House would be concerned, should you file your accounts with them in that time, it would be a debt.
You then take out of the company £1,000 a month to live on. This would not be wages, it would be the company paying you back £1k a month of that loan for 1 year.
As far as the tax is concerned there is no PAYE because you haven't had any pay from the company, you've earned nothing to put it another way. However the company has gradually been repaying it's loan to you - and you have been using those repayments to put food on the table and live on.

I'm perhaps oversimplifying it there, but that's a summary of a tax efficient way to invest into a company if any of that investment is needed to "pay" you too.

As for using an online company formation service to setup your company, almost all the ones you will find online are powered by the software my day job creates for that industry. I'm bias but our software is easier to use and less complicated that the Governments own platform and the cost between them all us comparable, even Quick Formations mentioned earlier that I sold in 2014 still runs on our eFiling platform. You're no better or worse of using a formation agent website or doing it on the gov.uk website yourself at a basic level, I just think the formation agents website would be easier to use.

Ohhhh interesting, thanks.
So there are two ways to draw my pay:
(but the company is still making money from my work)
1- As debt returned to me (no PAYE)
2- As PAYE (instant income tax pay)
Both ways I pay income tax at the end of the day
But.....as I have been trading as sole trader, HMRC has sent me a heavy bill for Tax on account for the year April 2020-April 2021 (I paid half already) so, if I get on PAYE, I am paying tax for both years at the same time.

japancool · Mar 21, 2021

Adalberto P said:
Both ways I pay income tax at the end of the day

You do not pay tax on a repayment of a director's loan.

Adalberto P · Mar 21, 2021

japancool said:
You do not pay tax on a repayment of a director's loan.

I meant, the money I lend to the company is money that I have already paid tax on (no lottery winnings

)

Mr D · Mar 21, 2021

You can also as a shareholder receive money by way of dividends from the company profits.
Its got a small tax free allowance different from your personal tax allowance and the tax rate is different.

The director decides dividends. The shareholder receives them - can be the same person of course.

Joseph Bartosiewicz · Feb 16, 2026

Honestly, Adalberto, those online services aren't "cowboys"-they’re just automated. Since you're the sole owner, a cheap online package is usually fine because your setup is simple. An accountant charges a premium for personalized tax advice, which you might not need just to get the paperwork done. Just keep an eye out for hidden costs like "mail forwarding" or "address privacy" that can bump up that £12 price tag quickly.

Lisa Thomas · Feb 17, 2026

Adalberto P said:
Ohhhh interesting, thanks.
So there are two ways to draw my pay:
(but the company is still making money from my work)
1- As debt returned to me (no PAYE)
2- As PAYE (instant income tax pay)
Both ways I pay income tax at the end of the day
But.....as I have been trading as sole trader, HMRC has sent me a heavy bill for Tax on account for the year April 2020-April 2021 (I paid half already) so, if I get on PAYE, I am paying tax for both years at the same time.

No 3 ways, all of which have different tax implications on you and the company.

DLA, employee wage, dividends or a mixture.

These really are questions for your accountant so you might as well pay them c£100 to set the company up properly for you and give you proper advice.

johndon68 · Feb 17, 2026

Joseph Bartosiewicz said:
Honestly, Adalberto, those online services aren't "cowboys"-they’re just automated. Since you're the sole owner, a cheap online package is usually fine because your setup is simple. An accountant charges a premium for personalized tax advice, which you might not need just to get the paperwork done. Just keep an eye out for hidden costs like "mail forwarding" or "address privacy" that can bump up that £12 price tag quickly.

Adalberto asked the question 5 years ago...

Gecko001 · Feb 17, 2026

Adalberto P said:
I meant, the money I lend to the company is money that I have already paid tax on (no lottery winnings )

Good point. So, going back to Ozzy's example of giving your Ltd company a £12K director's loan, and that Ltd company paying the loan off to you at £1K per month, there would be no tax efficiencies at all. You might as well put your money in a savings account and take out £1K per month. At least putting the £12K in a savings account would get some interest.

fisicx · Feb 17, 2026

Adalberto is no longer a member. Closing this ancient thread.

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