If you’re thinking about turning your idea or existing side hustle into a company, this guide is for you. We’ll help you decide whether incorporation is the right move, when to do it, and how to get it done without the hassle.
You’ll also find out what’s new for 2024 and 2025 (registered email addresses and upcoming ID checks), what it costs, how long it takes, and what to do once you’re officially on the Companies House register.
At Harper James, we help founders and finance leaders set up the right company structure, draft solid articles and shareholder agreements, and get investor ready, all without draining your legal spend. If you already know you’ll need help with structure, share rights or bespoke articles, speak to our corporate lawyers and we’ll map out the fastest, safest route for your business.
Jump to:
- Is incorporation right for me right now?
- What does ‘incorporated’ mean?
- When is the best time to incorporate a business?
- Step-by-step: how to incorporate a private limited company
- How long does it take and what does it cost to incorporate a business?
- Articles of association - model vs bespoke
- Share capital and classes at incorporation
- Sole trader or existing partnership: should you switch?
- Do I need to incorporate an online business?
- Do I need a lawyer to incorporate a business?
- How to obtain (and use) your certificate of incorporation
Is incorporation right for me right now?
Incorporation creates a separate legal entity that can own assets, sign contracts, and take on liability in its own name. That limited liability can be a real safety net when you start hiring, signing bigger contracts, or taking investment. It also adds credibility with banks and investors.
The trade-off is more admin. You’ll need to file annual accounts, submit a confirmation statement, and make certain details public through Companies House.
If you’re still testing an idea with minimal risk or spend, staying a sole trader for a while can be a sensible choice. But once you’re hiring, entering into contracts that carry risk, seeking funding, or need clear ownership of intellectual property and a business bank account, incorporation usually becomes the smarter option.
What does ‘incorporated’ mean?
In the UK, being incorporated means your business has been registered at Companies House and now exists as a separate legal entity with its own company number and a certificate of incorporation. That certificate proves the company legally exists and shows its formation date. You will usually receive it when you register online.
Limited versus incorporated and other structures
- Incorporation is the process of creating the legal entity.
- Limited refers to the liability protection it provides.
Common options founders consider
- Private company limited by shares (Ltd): This is the default choice for most growth businesses raising equity. Shareholders’ risk is limited to the amount they invest. You will choose articles of association and set the initial share capital.
- Company limited by guarantee (CLG): Often used for non-profits or membership organisations. Members promise a small amount, often £1, if the company is wound up.
- Limited liability partnership (LLP): Suitable for professional or project-based ventures where partners want the flexibility of a partnership with limited liability. This requires two or more members.
- Community Interest Company (CIC): A limited company that must deliver a community benefit and is regulated by the CIC Regulator. This is useful for social enterprises.
We discuss more about the different types of business structure in our article.
When is the best time to incorporate a business?
Useful triggers for incorporation include: hiring staff, signing contracts that carry risk, taking investment, wanting clear ownership of intellectual property, needing VAT or PAYE registration, opening a business bank account, or preparing to scale and putting governance in place.
Investors also expect proper governance, such as board decisions, share rights, and vesting, which can be difficult and costly to implement later.
The 2024/25 rule changes founders must know
Recent and upcoming Companies House reforms mean:
- Since 4 March 2024: There are stronger checks on company names. New rules require that registered office addresses cannot be PO Boxes and must be appropriate. A registered email address is now mandatory, but it is not made public. Companies must also provide a lawful purpose statement at incorporation and confirm it annually.
- From 18 November 2025: Identity verification will be compulsory for new directors and new PSCs at the time of incorporation. Existing directors and PSCs will need to verify their identity within a 12-month transition period, as confirmed in August 2025. Verification is expected to be completed via GOV.UK One Login or an Authorised Corporate Service Provider.
We discuss the upcoming Companies House Director ID changes in our update.
Step-by-step: how to incorporate a private limited company
- Choose a name and check availability. Be aware of sensitive or restricted words that need prior approval.
- Registered office and email. Your registered office must be a physical UK address in the same jurisdiction (England and Wales, Scotland, or Northern Ireland) and must be appropriate (no PO Boxes). You must also provide a registered email, which will not appear on the public register.
- Appoint directors and shareholders. You need at least one director and must set your initial shareholders.
- Identify your PSCs. Typically, anyone with more than 25% of shares or voting rights must be declared as a person with significant control at incorporation.
- Pick your SIC code(s). These describe your main business activities; use the condensed list provided by Companies House.
- Articles of association. Choose either the model articles or bespoke articles tailored to your governance and investor plans.
- Statement of capital and share details. Set your initial number of shares, their nominal value, and rights. There is no requirement for authorised share capital.
- File your application. Register online for speed and convenience or submit by post using Form IN01. Once accepted, you will receive a certificate of incorporation.
How long does it take and what does it cost to incorporate a business?
- Online incorporation: £50 and usually complete within 24 hours (processing can be slower in busy periods).
- Paper (post) using IN01: £71 and typically 8–10 days.
- Same day service: available for a premium fee (£78) when filing via approved routes.
Articles of association - model vs bespoke
Model articles are a useful starting point, but many growth businesses outgrow them quickly. Bespoke drafting lets you:
- Clarify board decision-making and director quorum
- Hardwire leaver provisions
- Align drag/tag with your shareholders’ agreement
- Support founder vesting and option pools via share classes
- Fix sole director quirks early
If you’re raising, issuing options, or sharing equity among cofounders, get advice before you file. See our FAQs on articles of association and why it's important to have bespoke articles drafted.
Share capital and classes at incorporation
When setting up your company’s share structure, it’s important to plan for flexibility. Use a low nominal value, often £0.01, and issue a sensible number of ordinary shares, such as 100 or 10,000, so you have room for future allocations without creating fractions. If you plan to grant options or raise investment soon, speak to us about share classes and rights before committing. The old concept of authorised share capital no longer applies, what matters now is the number and rights of shares you actually issue and what your articles of association allow.
Find out more about share capital in our share capital FAQ guide.
Post incorporation must-dos (your essentials checklist)
- First board minutes approving matters like bank, accountants and share allotments.
- Statutory registers: keep your registers of members and (until changes take effect) directors and PSCs. (From 18 Nov 2025, companies will no longer be required to keep certain statutory registers, directors, directors’ residential addresses, secretaries and PSCs, though you must still keep your register of members and keep Companies House filings up to date.)
- HMRC: register for Corporation Tax within 3 months of starting to trade (this is separate from incorporation).
- Banking: open a business account (you’ll often be asked for your certificate of incorporation).
- VAT/PAYE: consider VAT registration if you pass the threshold and PAYE if you’ll pay staff (including directors).
- Confirmation statement: diarise your annual due date; since March 2024, your statement includes a lawfulpurpose confirmation and a registered email if not already provided. Online filing costs £34.
We offer growing companies company secretary management, easing the filing burden off you.
Sole trader or existing partnership: should you switch?
Drivers for moving to a company usually include risk management, brand perception, investor diligence, tax planning and exit readiness. Watch the traps: transferring assets/IP into the company, contracts that need novation, and potential TUPE issues if people are moving over from a business you already run. A short structuring chat upfront avoids pain later.
Do I need to incorporate an online business?
Even if your business operates online, the type of channel you use doesn’t change your incorporation choices. Online businesses still need to make the same decisions about structure, while also meeting specific consumer and data protection obligations. If you sell to consumers online, make sure you follow the Consumer Contracts Regulations and core consumer law guidance. If you handle personal data, follow the ICO’s steps for small businesses and pay the data protection fee if required.
Do I need a lawyer to incorporate a business?
Many founders can complete the online registration form themselves. Where lawyers really add value is in planning your company’s governance, including articles of association and shareholders’ agreements, setting share rights and vesting schedules, clarifying intellectual property ownership, and preparing for investment so due diligence does not derail your funding round. If any of these areas are on your roadmap, it is worth seeking tailored legal advice.
We discuss the importance of using lawyers during fundraising, and why you should use a lawyer for setting up your business in our mini-series.
How to obtain (and use) your certificate of incorporation
You’ll get a certificate of incorporation once your application is accepted. It confirms your company exists and shows the date and number - banks and investors often ask for it. You can order certified copies later if needed.
Common mistakes to avoid
- Picking a restricted or sensitive name without permission.
- Overlooking PSC disclosures or getting them wrong.
- Copy pasting model articles that don’t fit your governance or funding plans.
- Misunderstanding authorised share capital (it no longer applies).
- Ignoring the 2025 ID verification timetable and registered email/address rules.
Ready to incorporate?
We can help you pick the right structure, draft bespoke articles and a shareholders’ agreement, set up clean governance and prepare for investment, at a cost that won’t break the bank. Speak to our corporate lawyers today, and get a clear, actionable plan for your incorporation.
