There are different steps involved in setting up a new company, from registering directors and shareholders to adopting articles of association, so it is easy to make errors. Deciding to form a company is an exciting step that can be taken by anyone. Over the years Companies House has made it easier to form a company by moving the process online rather than having to fill out a myriad of forms and send them off via post. Reliable formation companies offer these easy to use and secure online company registration systems. It is much more user-friendly than the Companies House system itself.
Though it’s hard to go wrong, here are 5 avoidable mistakes you can always be careful while forming your new UK company online.
1. Appointing an ineligible company director
You cannot appoint a company director who is under the age of 16, an undischarged bankrupt, or a disqualified director. If you do, Companies House will reject your application. But a director can be from any country. He or she need not necessarily from UK.
2. Providing an unsuitable registered office address
Choosing the right address is more important than you think as it is where all official communications will be sent to from HMRC and Companies House. This doesn’t have to be the offices you are operating from, you can use your home address. However, the address you choose will be visible to the general public via the Company Register, so make sure the address you choose is one that you are comfortable having in the public eye.
3. Forming the wrong type of company
From limited companies to limited liability partnerships, you’re at will to choose the type of company you’d want to form. And choosing the wrong company type is one of the easiest mistakes you can make. Unless any special purpose such as charity or not for profit organisation, majority of the companies registered in the UK fall under private limited company. However, it’s always a good idea to take professional help before you make your choice.
4. Not specifying shareholders
On the face of it you can have as many people working for your company as you would like, but if they own any part of the company, or have any influence over the decisions being made then they have to be mentioned. With private limited companies you put a value on the shares being handed out and they will always be the value you state. However, with a public limited company the shares are traded in an open market, in order for this to happen, the company needs to be able to generate enough revenue.
5. Using personal Bank Account
There are a few reasons why you shouldn’t use your personal bank account for business purposes. First, it can be difficult to keep track of your business expenses if they are mixed in with your personal expenses. This can make it difficult to manage your finances and budget for your business. Additionally, using a personal bank account for business purposes can make it difficult to get a business loan or line of credit from a financial institution, as they may be hesitant to lend money to a business that doesn’t have its own dedicated bank account.
The risk of making mistakes when forming a limited company online is further reduced if you use the services of a company formation agent. With just a little bit of caution, it’s very easy to avoid these mistakes. Doing it right saves you time, money and unnecessary hassle.
Here, at Knowea Formation, we take good care for your requirement regarding Company Formation in UK. Each and every application is carefully checked for any errors and anomalies that may slip through the built-in checks. This additional level of review significantly minimises instances of company formation mistakes and rejected applications.