You've shipped something. People are using it. Now someone wants to pay you, or you're ready to add a Stripe button, and a question stops you before the code does: do you need to be a registered company first?
Short answer: no, not to start. But there's a specific point where you're legally required to register with HMRC even as an individual, and a separate, genuinely judgement-based question about whether a limited company is worth the extra admin. Both are simpler than they sound.
You can take money as an individual, up to a point
In the UK you don't need to form a company to sell something or charge for a service. You can trade as a sole trader, which just means you personally, using your own name or a trading name, are the business. No registration is required to try this. What triggers a legal registration requirement is earning more than £1,000 in a tax year (before expenses) from self-employed activity, the UK's trading allowance threshold. Cross it and you must register for Self Assessment with HMRC, with a deadline of 5 October in the second tax year of trading (so if your side project starts earning in the 2026-27 tax year, the deadline is 5 October 2027).
Under that £1,000 figure, you can genuinely test whether people will pay for your project without any registration at all. This is the honest MVP path: get a few real payments in before you do any paperwork.
When a limited company actually earns its admin overhead
A limited company is a separate legal entity from you. That single fact is where every real advantage comes from:
- Liability. If the company owes money or gets sued, your personal assets are (with normal exceptions like fraud or personal guarantees) protected. As a sole trader, there's no separation; you are personally liable.
- Credibility with certain counterparties. Some clients, marketplaces and payment providers are more comfortable dealing with a registered company than an individual, particularly at higher transaction values.
- A cleaner base for the IP question. If you ever plan to bring in a co-founder, raise money, sell the product, or work with an incubator like Qeetoto, having the product's IP sit inside a company from early on avoids an awkward, sometimes costly, transfer later.
- Tax treatment changes. Companies pay Corporation Tax rather than Income Tax, and profit can be taken as salary or dividends in different proportions. Whether that's better than staying a sole trader depends on how much the project actually earns; this is genuinely a "get an accountant to run your numbers" question, not something a generic guide should answer for you.
None of this means incorporate immediately. Plenty of side projects stay sole-trader forever because the revenue never justifies the switch. The point where it's worth reconsidering is usually: real, recurring revenue, a co-founder or outside investment in the picture, or a client who specifically asks for a limited company.
What forming a company actually costs and takes
If you do decide to incorporate, registering with Companies House is the whole legal step, and it's smaller than most developers expect:
- Online registration: £100 (the standard digital route, most people's route; this fee rose from £50 on 1 February 2026).
- Same-day digital service: £156, if you need the company to exist today.
- Paper application: £124, and considerably slower.
You'll need: a company name that isn't already taken, a registered office address (a home address works, though it becomes publicly searchable, which is why many people use a registered-office service instead), at least one director (you), and to pick a SIC code describing what the company does. Most straightforward single-director software companies are done same day online.
The one tax registration almost every growing side project eventually hits
Whether you're a sole trader or a limited company, VAT registration becomes mandatory once your taxable turnover passes £90,000 in any rolling 12-month period, not the tax year, any 12-month window. That's turnover, not profit. Miss it and you have 30 days to register once you realise you've crossed it. Most side projects are nowhere near this early on, but it's worth knowing the number exists before you're the one googling it at speed.
What this guide doesn't cover
Company formation is one legal step among several a commercial product actually needs: a Terms of Service and Privacy Policy that hold up, correct handling of customer data under UK GDPR, and (if you take card payments) basic PCI compliance through your payment provider. Registering the company doesn't handle any of those.
This is exactly the gap Qeetoto exists to close. We help developers who've built something real go through the compliance, legal, hosting and marketing work needed to charge money for it properly, in exchange for a share of revenue, while you keep your IP. If you're at the point in this guide where the answer was "yes, worth incorporating", or you're not sure which answer applies to you, get in touch and we'll talk through where your project actually stands.
FAQ
Can I use my own name to invoice clients without registering anything? Yes, as a sole trader, up to the £1,000 trading allowance. Above that you must register for Self Assessment, though this is still not a limited company, it's registering yourself as self-employed.
Does forming a company protect me if my app has a security incident or a bug that costs a customer money? Limited liability protects your personal assets in most circumstances, but it doesn't remove the underlying legal risk to the company itself. Proper terms of service, insurance and basic security practice matter regardless of company structure.
Is a limited company better for tax, or worse? It depends entirely on how much the project earns and how you plan to take money out of it. Below a certain profit level, sole trader is often simpler with no tax disadvantage; above it, incorporating can reduce the tax bill. Get an accountant to run actual numbers before deciding; this isn't a guess-your-way-through-it decision.
Do I need a company before I can add Stripe or another payment processor? No. Payment processors generally support individual/sole trader accounts as well as company accounts. Check the specific processor's requirements, but this alone shouldn't be what forces the decision.