Setting up a UK company: Accountant or lawyer?

What Is Involved in Setting Up a UK Company

Setting up a UK company means registering it with Companies House, which requires a company name, a registered UK address, details of directors and shareholders, and a memorandum and articles of association. Since these are regulated activities, both accountants and lawyers can carry out this work on your behalf, provided they’re properly authorised.

Whoever you instruct will also need to carry out anti-money laundering (AML) and Know Your Client (KYC) checks before they can act for you. This is a legal requirement for regulated professionals in the UK, not an optional extra, and it applies whether you choose an accountant or a lawyer.

Since November 2025, there’s an additional step. Every director, and every person with significant control (PSC), of a new UK company must verify their identity with Companies House. For directors, this must happen before incorporation can be completed, there’s no way around it. For PSCs who aren’t also directors, there’s a 14-day window after registration to confirm verification. Both apply regardless of nationality or where the individual lives, so it’s worth building into your timeline if your directors or major shareholders are based overseas.

Accountant vs Lawyer

An accountant setting up your UK company is typically thinking beyond the registration itself. They’ll usually bundle formation together with the practical registrations your business needs immediately afterwards, corporation tax, a payroll scheme if you’re hiring, and VAT registration if it applies. Many accountants also handle the ongoing bookkeeping and reporting once the company is trading, so the relationship continues naturally past day one.

A lawyer’s core strength is different. Solicitors are the right choice when your UK entry involves complex contracts, commercial agreements, or legal structuring questions that go beyond company registration. If you’re negotiating a UK lease, drafting supplier agreements, or need advice on liability and governance, a law firm brings expertise an accountant generally won’t.

Fee structure is one of the clearest practical differences. Accountants commonly offer fixed-fee packages for company setup, which makes costs predictable from the outset. Lawyers more often bill by the hour, which can suit a one-off legal question but adds up quickly if you’re using them for the full setup process.

Why It Matters for Overseas Companies

For an overseas business, predictability matters more than it might for a UK company extending its own operations. You’re budgeting for entry into a market you don’t have first-hand pricing experience in, so a fixed fee removes a layer of uncertainty that an hourly rate doesn’t.

There’s also a practical continuity point. Whichever professional handles your formation, you’ll need an ongoing relationship with an accountant regardless, for annual accounts, tax filings, and payroll if you have UK employees. Starting that relationship with the same firm that handles formation often means fewer handoffs and less repeated due diligence.

That said, this isn’t necessarily an either-or decision. Many accountancy firms work alongside law firms on the same client, sharing AML and KYC checks with the client’s permission rather than duplicating them. If your UK entry genuinely needs both commercial legal advice and day-to-day accounting support, engaging both from the outset can work out more efficient than choosing one and adding the other later.

How It Works in the UK

In practice, most overseas companies start with a scoping conversation, working out what the UK entity needs to do from day one. That typically covers the legal structure, whether Companies House registration for a subsidiary, or a different route if you’re setting up a branch  https://www.paulbeare.com/branch-office-vs-branch-registration-uk/, tax registrations you’ll need immediately, and whether you’re hiring UK staff from launch.

Once the professional you’ve instructed has completed AML and KYC checks and confirmed director identity verification is in place, formation itself is usually quick, often a matter of days once Companies House has everything it needs. What takes longer is the surrounding setup: registering for corporation tax, setting up payroll if applicable, and opening a UK business bank account, since banks run their own separate checks.

If your accountant is coordinating all of this under one engagement, these steps tend to run in parallel rather than one after another, which is usually where a bundled service saves the most time compared with instructing separate providers for each piece.

Key Compliance Requirements

Beyond the AML, KYC, and director identity verification checks already covered, a newly formed UK company has ongoing obligations from day one. It must file a confirmation statement at Companies House at least once a year, keep its registered details up to date, and submit annual accounts within the statutory deadline.

If the company has UK employees, it needs to register for PAYE and, depending on staff numbers and pay, may need to set up a workplace pension scheme for auto-enrolment. VAT registration becomes a requirement once turnover crosses the relevant threshold, or can be done voluntarily earlier if it suits the business.

None of these ongoing obligations disappear once the company is formed. Whoever handles your setup, it’s worth being clear from the outset whether they’re also covering these follow-on requirements, or whether that’s a separate engagement.

Common Mistakes International Businesses Make

The most common mistake is choosing a provider based on formation cost alone, without checking what happens after the company is registered. A cheap formation-only service can end up costing more once you’re separately sourcing tax registration, payroll setup, and banking support from other providers.

Another frequent issue is underestimating the identity verification requirement for overseas directors and significant shareholders. Because the process involves biometric documents or a UK-authorised verification route, it can take longer to arrange from abroad than businesses expect, and for directors it’s a prerequisite for incorporation, not something that can be sorted out afterwards.

Businesses also sometimes assume a lawyer is required simply because “setting up a company” sounds like a legal process. In most straightforward cases, an accountant handling formation alongside the practical registrations is the more efficient route, with legal advice brought in only where genuine contractual or structuring complexity exists.

How Paul Beare Helps With This

At Paul Beare, we handle UK company formation and structures  https://www.paulbeare.com/uk-company-formation/ as part of a single engagement rather than a standalone task. That includes registering the entity, registering for corporation tax, setting up a payroll scheme where needed, and VAT registration if it applies.

We also support opening a UK business bank account  https://www.paulbeare.com/uk-business-bank-account/, completing the forms on your behalf, and can prepare compliant employment contracts and workplace pension arrangements through our HR and employment services https://www.paulbeare.com/hr-employment-services//  if you’re hiring UK staff. Where a client genuinely needs legal input alongside this, we work with a number of UK law firms and can share AML and KYC checks with a client’s permission, so you’re not duplicating the same due diligence twice.