How and why you should set up your own limited company

Article written by Integro Accounting.

Setting up a limited company isn’t a decision to be taken lightly, and while you may sometimes feel like you’re being bombarded with information about the pros and cons, there are, in fact, some simple things to consider and steps to take should you wish to go ahead.

Let’s first focus on the benefits of “going limited”, how long it will take to set up your company and your admin duties.

The main advantages and disadvantages of a limited company


  • As the name suggests, you will have limited liability, in other words your company will be considered a separate entity to you so the only finances at risk are those of the company, not yours personally.
  • You will have a unique name (that you’ll register at Companies House) that cannot be used by anybody else and is protected by law.
  • As a limited company there are a wide range of allowances and tax-deductibles available to you to claim against company profits.
  • You will be able to choose to pay yourself through a combination of dividend and salary – often considered the most tax efficient combination. This is because you don’t pay national insurance on dividends so the small salary will trigger a N.I. record for your state pension while allowing you to minimise your personal tax liability. In addition, you’ll be afforded greater tax planning opportunities.


  • There’s no denying that, as you are ultimately starting your own business, there will naturally be a larger amount of admin required when setting up a limited company. Again, this depends on your trade and of course the help of a good accountant can reduce that time to free you up to do what you do best.
  • Once you’ve registered with Companies House, because information about your business and its earning can be viewed by the public, you will have less privacy than you may be used to.

Make sure you check your IR35 status before starting

IR35 was introduced to reduce the volume of ‘disguised employees’ that had surfaced over the years, those ultimately working as a permanent employee, yet taking all the tax benefits of a contractor.

In April 2021 HMRC rolled out IR35 across both the public and private sector. Inside IR35 meant that your contract would deem to be best suited to an umbrella company as your contract would maybe appear to close to working to that of a standard permanent employee , and outside IR35 meant your contract would be deemed a contract beneficial to a limited company. Previously the contractor would take ownership of their IR35 status. However, this has now shifted and the end client would need to determine whether your contract is deemed inside or outside IR35. Again, if you are a genuine contractor and your contract states you take all the risks and responsibilities to that of a limited company contractor, the end client would have no reason to deem your contract as outside IR35. This can always be supported by doing a FREE contract review. More details about this can be found on the Integro Accounting website: FREE IR35 review service.

The logistics of setting up a limited company

It would be easy to think there is a lot of rigmarole involved in setting up your Limited Company once you’ve decided to do so, but in reality it’s pretty straightforward. There is, however, a checklist of things that you need to complete:

  1. Choose your company name and make sure you’re happy with it – you’ll want it to have longevity even if you expand in the future so don’t rush this process. Try and think of something that reflects what you do and, of course, nothing that has already been used as that won’t be allowed. You can check this on the gov website here: Limited company name checker.
  2. Decide who will be directors and shareholders – this may well just be you! Once decided you’ll need to supply their names, addresses, nationalities, and dates of birth when completing your application. For shareholders you’ll also need to stipulate the number of shares allocated.
  3. Start out on the right foot and choose a bookkeeping software that will meet your needs, and those of HMRC. This is important because, moving forward, software needs to be HMRC compatible to comply with ‘Making Tax Digital’ (MTD). We’d advise that you talk to your accountant for recommendations – some include software such as Integro Accounting who include award-winning, HMRC compliant FreeAgent as part of their inclusive price.
  4. Decide whether you need an accountant. It can be tempting to save costs and do this yourself if your business is very straightforward. However, more often than not using an Accountant can save you money in the long run as they should ensure you won’t miss any deadlines, incur any fines and advise you on the most efficient (not to mention, profitable) way to do your tax planning.
  5. Make a list of all the other ‘extras’ that you need to consider. This will include insurance, a business bank account, finding out what your legal and financial obligations are, choosing an accountant who will work in your best interest etc.

So when can you start trading?

Once you have considered the above you are ready to register your company – you can do this direct with Companies House yourself via a paper form in the post, an online form, or your accountant can do this for you. Our partners Integro Accounting are offering all new clients the option to form their limited company for just £75 + VAT (usually £120).

Your company is usually incorporated within just 24 hours, after which you will then receive your certificate of incorporation which you’ll need to open your business bank account. As an aside, you must have a separate business bank account to your personal account if trading as a limited company as this will clearly show all transactions and payments coming in and out of the business.

As soon as your company is fully incorporated you can start trading – it really is that simple!

As ever, if you’re not sure or have any queries, talk to your accountant who will be able to advise you and assist you in the process should you wish them to. Consider an all-inclusive fixed fee package with an Accountant such as Integro so you’ll know exactly how much it will cost you every month and have the peace of mind that they will be working in your best interest at all times.

For further support setting up your limited company or understanding our various accountancy packages call 0207 096 2659 to speak to one of our fully qualified accountants or email for further information.

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