PRE INCORPORATION
Starting a company is easy. Changing the structure, ownership or funding decisions afterwards can be much harder. Understand what you are choosing before you register.
Grounded in live HMRC, GOV.UK and Companies House data. Five free questions, no card needed.
Before you register
Are there co-founders?
Do you expect external investment?
Have you already spent money on the business?
Will you start selling immediately?
The decisions that matter now
Get these right before you register, not after.
There is no automatically correct answer. The right structure depends on your income, your appetite for admin, and how you plan to take money out of the business.
A limited company gives you legal separation from the business and can be more tax-efficient at higher profits, but it comes with more reporting and less flexibility over how money moves between you and the company. A sole trader setup is simpler to run, but you and the business are legally the same thing.
Should I be a sole trader or set up a limited company?
Shares determine economic ownership: who gets what if the company is sold or wound up, and, depending on class, who gets a vote on key decisions.
How you split shares between founders can also affect how easy it is to bring in investors later and how much each of you gets diluted when you do. It's worth thinking through properly rather than defaulting to an even split.
Shareholders' agreements, vesting schedules and leaver clauses are legal documents. WiseMind can help you understand what they're for, but drafting them is a job for a solicitor.
My co-founder and I are doing this together. Should we just split the shares 50/50?
If you expect angel or early-stage investment, the way shares are issued and structured now can affect whether investors qualify for schemes like SEIS or EIS later.
It's worth thinking about before shares are issued, not after a term sheet lands.
Could we qualify for SEIS?
Many founders spend money on the business, laptops, domain names, legal fees, before the company even exists.
Some of these pre-incorporation costs may still be relevant once you're trading, so keep every invoice and receipt even if the company isn't set up yet.
Can I claim back things I have already paid for personally?
Incorporating, being active, and trading are three different things, and the date you choose for each has consequences.
If you already know you'll be trading close to the VAT threshold, it's worth a quick look at when registration might apply, though that's covered properly once you're actually trading.
Should I incorporate now even though I have not started selling yet?
The full VAT picture is covered on the Early Trading page →
Real questions founders ask at the pre-incorporation stage.
Should I be a sole trader or set up a limited company?
At what profit level does a limited company actually make sense for me?
How many shares should we create?
Will our share setup cause problems when we raise investment?
Could we qualify for SEIS?
Should I register for VAT before I have to?
WiseMind can help you compare your options, understand the relevant UK rules and see the potential tax, cash and ownership consequences before you make the decision. Guidance is grounded in HMRC, GOV.UK and Companies House sources, and WiseMind will always tell you when a decision needs a solicitor or specialist tax adviser rather than a plain-English answer.