The number of people becoming self-employed is rising rapidly. By 2020, there’s a chance that half of the working population could be working for themselves. Many of those people could benefit by starting a limited company, but are put off the idea by the thought of how much it might cost. So what is the cost of starting a limited company in the UK?
What many people don’t realise is that getting started in a limited company can be a lot less expensive than you might think. So, you want to know more about the exact cost of starting a limited company in the UK? Read on to find out what you do and don’t need to spend money on.
How much does it cost to register a company name?
The actual cost to set up a business isn’t much at all. There is a £12 fee you have to pay to Companies House if you go to them directly. However, if you register a company through Companies House approved agents, such as The Formations Company, you can get a better price. And, more importantly, you’ll receive more of a helping hand in completing the application.
There are a number of other costs which you might incur, such as printing formal company documents like share certificates and your Certificate of Incorporation. These are usually worth getting on official grade paper – they can help you get the most out of your formation and prepare you for opening a business bank account or meeting potential investors.
Some of the other business setup costs depend completely on the nature of your company and how you plan to run it. Here are just a few to look out for:
- Physical premises, like an office or workshop: Having business premises will naturally incur a cost in terms of rent. However, if you’re in the early stages of setting up the business you may want to save money by starting from your own home.
- Hiring staff: If and when you decide to start hiring, staffing will be your biggest cost as an ongoing business.
- Renting or buying equipment: Buying equipment can involve a high upfront cost, while renting spreads the cost but will be more over time.
- Creating marketing materials: Every business will need a marketing strategy which should include PR outreach, brochures, fliers, a website and so on. For more advice on this, check out the marketing section of our help centre.
Why start a limited company in the first place?
It’s worth noting that regardless of the cost to set up a business, the process of starting a limited company can save you money in itself. It can certainly be more tax efficient, especially if you are starting to earn a considerable amount as a sole trader. Secondly, it limits your liability which can offer protection in case something goes wrong and costly legal services are needed.
Don’t forget, the cost of starting a limited company in the UK is largely down to you, and will depend on your particular needs. The actual expense and trouble involved with simply registering a company name is much lower than you might think. Plus, by using our formations service, you can ensure all the details are taken care of and that you have professional support at every stage of the process. Visit our help centre or see our package prices to find out more.