Thinking about starting a business?
One of the first questions you might ask is, “How much does it cost to start a limited company?” Good question!
Knowing the real costs upfront helps you plan better. It saves you from surprises and helps your business grow smoothly.
The truth is, starting a limited company is more affordable than many people believe. You don’t need a huge budget to get going!
In this blog, we’ll break down:
- Registration costs
- Optional expenses
- Ongoing costs
Let’s get into it!
Understanding the Basics of Starting a Limited Company
What Is a Limited Company?
A limited company is a type of business structure. It means your company is a separate legal entity from you.
Simply put, your personal assets are protected if anything goes wrong.
Key features:
- Separate legal identity
- Limited liability protection
- Ownership through shares
Many entrepreneurs love this setup. It looks professional and opens more opportunities for growth and funding.
Why It’s Important to Know the Full Costs
Starting smart means planning smart.
- Avoid surprises: Know what you’re signing up for.
- Budget for success: Plan your spending early.
- Sustainability: A strong start leads to steady growth.
One-Time Costs When Setting Up a Limited Company
Company Registration Fees
Registering with Companies House (UK example)
In the UK, you register your company through Companies House.
Here are the fees:
- Online Registration: Around £12 (fast and easy).
- Postal Application: Around £40 (slower process).
Using an Agent or Third-Party Service
You can also use an agent if you prefer help.
- Costs usually range from £50 to £150.
- Pros: Faster, expert handling.
- Cons: Extra cost.
Legal and Professional Fees
Hiring a Solicitor or Business Advisor
Some businesses need legal advice, especially for complicated setups.
- Average cost: £300 to £1000 depending on complexity.
Optional Extras (Articles of Association, Shareholder Agreements)
- Standard templates are free.
- Customized legal documents can cost £100 to £500.
Business Bank Account Setup
Bank Fees for Opening a Business Account
Many banks offer free business accounts for the first year.
After that:
- Monthly fees: Typically between £5 to £10.
Other Initial Costs to Consider
Registered Office Address Services
Want privacy?
You can use a virtual office service:
- Cost: £15 to £30 per month.
Domain Name and Website
Every serious business needs a website!
- Domain name: Around £10 to £20 per year.
- Basic website setup: Between £100 and £500.
Business Insurance
Depending on your industry, you might need insurance:
- Public Liability Insurance: Around £100 to £200 per year.
- Professional Indemnity Insurance: Starts from £150 annually.
Ongoing Costs After Incorporation
Annual Filing and Compliance Fees
Confirmation Statement
Every year, you must file a confirmation statement.
- Cost: £13 online or £40 by post.
Annual Accounts Preparation
You might need an accountant:
- Basic packages start at £200 to £600 per year.
Corporation Tax Filing
Hiring an Accountant
- Full tax filing service costs around £300 to £1000 annually.
DIY tax filing is possible if your accounts are simple but be careful — mistakes can be costly!
Business Bank Account Maintenance
Monthly Banking Fees
- Typical business account fees range from £5 to £10 a month.
Insurance Renewals
Annual Premiums
- Budget about £100 to £400 for yearly insurance, depending on your coverage.
Optional Costs for Scaling and Growing Your Limited Company
Hiring Staff and Payroll Management
Payroll Software or Outsourcing Payroll
If you hire employees:
- Payroll software costs around £5 to £10 a month.
- Outsourcing payroll could be £20 to £50 per month.
Marketing and Branding Costs
Logo Design, Branding Kits, and Digital Marketing
- Logo design: Around £50 to £300.
- Basic branding kits: Around £300 to £1000.
- Marketing campaigns: Varies widely, starting from £200 a month.
Office Space (If Needed)
Co-Working Spaces vs. Leasing an Office
- Co-working spaces: Around £200 to £500 per month.
- Private office lease: Starting from £500 to £1500 per month.
Factors That Influence Your Setup Costs
Type of Limited Company
- Private Limited Company (Ltd): Cheaper, simpler.
- Public Limited Company (PLC): More complex, expensive setup.
DIY Incorporation vs. Professional Services
Doing it yourself saves money.
Hiring professionals costs more but saves time and effort.
Business Size and Complexity
The bigger and more complex your business, the higher your setup and management costs.
Real-World Cost Estimates: Examples
Small Startup (One Founder, Online Business)
- Company registration: £12
- Domain and website: £150
- Insurance: £150
- Accountant (optional): £300
Total Estimated Cost: £600 to £700
Medium-Sized Business (Multiple Founders, Physical Location)
- Company registration + legal advice: £500
- Office rental deposit + first month: £2000
- Staff setup and payroll: £500
- Website and branding: £1000
- Insurance: £300
Total Estimated Cost: £4000 to £5000
How to Save Money When Starting a Limited Company
DIY Options and Templates
- Use free online templates for Articles of Association.
- Register your company directly with Companies House.
Bundled Service Packages
Some services offer:
- Registration
- Domain setup
- Accounting All-in-one for a discounted price.
Example: Packages starting from £50.
Planning Ahead to Avoid Hidden Costs
- Track annual filing deadlines.
- Budget for insurance renewals.
- Keep your books clean to avoid fines.
Conclusion
Starting a limited company isn’t free, but it’s very doable — especially with good planning.
Key takeaway:
Knowing your setup and ongoing costs early can save you a lot of time, money, and stress later.
