How Much Does It Cost To Set up a Company?

In a Nutshell…

The cost to set up a company is more than the £50 Companies House fee. From bank accounts, insurance, and professional services to branding, tools, and office space, hidden costs stack up fast. A virtual office is a smart, low-cost alternative, giving you credibility, privacy, and professional support without the hefty overheads.

Looking to start a company? The main question we hear from budding entrepreneurs is: how much does it cost to set up a company? While most only think about the registration fee, that’s just the tip of the iceberg.

In this guide, we’ll demystify the true cost of setting up a limited company in the UK, going beyond the basics to break down the expenses you really need to plan for. From essential legal fees and software subscriptions to the hidden costs that often surprise budding entrepreneurs, we’ll reveal what it truly takes. By the end, you’ll have a clear financial roadmap to budget with confidence and launch your business without any nasty surprises.

The Core Registration Cost to Set up a Company (The Good, The Bad, and The Costly)

So, how much does it cost to set up a company? The initial cost to register a limited company is surprisingly low; it is currently a one-off payment for the official registration of £50, with an option for a postal application that costs £71, while same-day, online registration is a one-off payment of £78.

There is also the option of using formation agents; these do come with an additional charge, typically starting at around £55 for the basic online incorporation that simplifies the process of setting up a business online. Further features that formation agents offer, like business bank account support or shareholder or partnership agreements, can come with a further fee.

The Hidden Cost to Set Up a Company 

While the initial fee is low, and the majority of formation agents aren’t too pricey, these aren’t the only costs that come with starting a business, and when looking seriously at starting up your own business, you should consider more than just the Companies House fee.

Costs of a Physical Office

The first “hidden cost to set up a company” associated with starting a business is the registered office address. While you can use your home address, this information will be public on the Companies House register, which may raise some privacy concerns, and renting or purchasing office space can be quite expensive, especially in a city centre. 

There are also costs associated with renting a physical office space, including rent, utilities and maintenance, that can all add up over time.

Bank Account Fees: 

Every business needs a dedicated bank account. While many banks offer “free” introductory periods, these are short-lived. Monthly fees, transaction charges, cash deposit costs, and international transfer fees all become recurring outgoings that can eat into your margins.

Insurance: 

Insurance is one of the most overlooked costs until something goes wrong. Common policies include:

• Public Liability Insurance – covering accidents involving third parties.
• Professional Indemnity Insurance – vital if you provide advice or services.
• Employers’ Liability Insurance – a legal requirement if you hire staff.

Premiums vary depending on your sector, turnover, and number of employees, but insurance is essential protection for any business.

Professional Services (Expanded): 

Professional services are another area where costs can quickly build up. From financial management to compliance, these are essential but often underestimated expenses for new businesses:

• Accountancy Fees – limited companies typically need professional support with annual accounts, which can cost anywhere from £100 to £350+ per month.
• Bookkeeping – whether hiring a bookkeeper or subscribing to accounting software like QuickBooks or Xero.
• Payroll – the cost of running payroll if you employ staff, either in-house or through a service.
• Filing Fees – such as the annual Confirmation Statement filing fee, which, while small, is a recurring cost.

Branding and Marketing:

Branding and marketing can also be costly, but they are essential for growth.

• Logo and Branding – whether you hire a professional designer or use free online tools to create your identity.
• Website – from domains and hosting to a professionally built website. A DIY website can cost very little, but the time you spend building your website is time you could be spending on your business, and a bespoke site created by a developer can run into the thousands.

Tools and Equipment:

Don’t forget the practical tools needed to run a business:

• Hardware – such as laptops, phones, and printers.
• Software Subscriptions – including productivity suites (Microsoft 365, Google Workspace), CRM systems, project management tools, and industry-specific platforms. These are usually monthly costs that can add up quickly.

These costs add up fast and can really hinder a startup, but there are options out there that can alleviate some of these burdens and help your business grow.

The Virtual Office Advantage

Starting a business is expensive, and an office lease can be the fastest way to drain your budget. But what if you could have the credibility of a prime city-centre office without the crippling cost and commitment?

A virtual office service, like the one at Grosvenor House, gives you just that. You get a prestigious St. Paul’s Square address for your business – keeping your personal address private and professional – at a fraction of the cost of a traditional rental.

But it’s not just an address. A virtual office is a complete business solution that includes:

• Professional Call Handling: A receptionist to answer your calls, so you never miss a lead.
• Mail Forwarding: All your mail is handled and forwarded to you, no matter where you are.
• Flexible Access: Need to meet a client? Book a professional meeting room or use a co-working space on demand.

In short, a virtual office provides all the key benefits of a fully staffed physical office – a professional image, dedicated support, and private spaces – for a simple, low monthly fee. It’s the smartest way to build credibility and grow your business without breaking the bank.

The Smart Alternative to a Traditional Office

Don’t let high overhead costs hold your business back. Get in touch with the Grosvenor House team to discover how a virtual office can provide a professional presence and the support you need to succeed – all at a price that fits your budget.

Frequently Asked Questions