Tag Archives: Company Formation

Are Free Company Formations Really Free?

Free Company Formation Options

We recently saw that one of the national accountancy firms are charging their customers £125 + VAT to form a limited company. They justify this on their website by stating that:

cheap online formations often don’t provide any telephone support, so if you do get stuck who is going to help you?

We have even seen offers of free company formations, which on first sight seem like great offers. It’s only when you read the small print that you actually find out that if you accept the free formation you must remain a client for a minimum of a year or even longer, meaning the so called free formation ends up costing you thousands.

At The Company Warehouse we provide Free Company Formations, so how do our packages stack up?

Phone support – We have a team of business consultants based at out office in Essex. They are available on the phone Monday to Friday 9.00am to 5.30pm. You can call them and ask them questions about the company formation process on 0800 0828 727.

Ongoing Costs and Tie-ins – There are none. It used to be a condition of our Free Formations that you had to open a bank account with our banking partner but we got rid of this requirement in February 2014. There are now absolutely no tie-ins on our Free Formation package.

Total cost – You will not end up paying thousands of pounds if you use our Free Company Formation service. It is free. Will we talk to you about the next steps for your company, making sure it is legally compliant and how you are going to market it? Yes we will. But this does not mean that you have to buy anything from us. Our Free Formation is Free and there is no obligation to buy anything else from us.

So this leaves you with a choice. You can pay an accountancy firm £125 + VAT to form your limited company or you can pay us, a company formation agent, £0.

Still not sure? Take a look at what our customers say about our services or give our consultants a call on 0800 0828 727.

UK Certificates of Incorporation and Apostille

A Certificate of Incorporation is often called the birth certificate of a company. It shows that a company exists and what its company number is (although not who owns it). The Certificate of Incorporation is often asked for when opening bank accounts or when signing big deals.

The Certificate of Incorporation is pretty much the only document that you get from Companies House when a UK company is formed. Depending on how you form the company you may receive the certificate of incorporation as a hard (paper) copy or in an electronic format (normally as a pdf). The hard copies are no different from the electronic ones, they have just been printed out. If you receive your certificate of incorporation as a pdf you can print it yourself and it will be just as valid as if you had received a hard copy from Companies House.

Limited Company Certificate of Incorporation

An example of a UK Private Limited Company Certificate of Incorporation

Whilst most UK banks and other authorities are aware of the way our certificates of incorporation work it can sometimes cause problems if you try to use them overseas. UK companies are relatively quick and cheap to form and so many people who never intend to trade in the UK form them as an alternative to potentially costly and lengthy procedures in their own countries. However because UK certificates of incorporation look relatively informal it can sometimes mean that international banks or authorities will not accept them.

This is where the system of apostille comes in. ‘Apostille’ is an international system for authenticating that a document is legally valid. It can either be a stamp or a small certificate which gets attached to your document. Apostilles always include the same information which includes the country where the document has been authorised, who it has been authorised by and what their qualification is. Once a document has an apostille stamp or certificate it should be accepted anywhere in the world.

There are a few different ways to get an apostille for a document. You can post some documents to the Foreign and Commonwealth Office who will add an apostille and return it to you. However this service does tend to take a few weeks. Alternatively many solicitors can issue an apostille or you can get it done by a notary public. Although there is no fixed price for getting an apostille it is usually fairly cheap (the Foreign and Commonwealth Office charge £30 plus postage).

All of our company formation packages include a Certificate of Incorporation in either electronic or paper format. For help choosing the best company formation package for your business give our business consultants a call on 01245 492777.

New Year, New Company: Checklist

New Year New CompanyIf you are one of the hundreds of people every year whose New Year’s resolution is to start a business then congratulations!

Starting a new business can be both exciting and stressful but it does not need to be overly complicated. Below we outline the basic steps you need to take to get your new business up and running.

1) If you have not already got one write a business plan. This does not need to be massively complicated but having a good plan will help you identify risks to your business as well as where your money is going to come from. A good plan can also be very helpful when opening bank accounts and looking for funding.

2) Your business is going to need a name. The name search function on our website will tell you what is available at Companies House and will identify most ‘sensitive’ words which might cause you a problem.

3) Before you finally settle on your business name it is worth checking that the domain name is available so that your email and website addresses can match your business identity.

4) Once you have a plan and some ideas on where to get funding you should think about what legal structure to use. A Sole Trader registration is the easiest way to start a new business. Forming a limited company is also fairly simple but comes with a variety of legal requirements which have to be fulfilled throughout the year. While limited companies are more tax efficient they are also more difficult to take money out of than if you are a Sole Trader. If you aren’t sure which is best for you we can talk you through the options. Either way you will probably need a business bank account.

5) As part of your business plan you should have identified how much funding you need. Although it can be hard to get money out of the banks these days there are still quite a few sources of funding available including new methods like crowdfunding.

6) Once you have your funding in place you can get your website built. The more time you can put into your website the more visitors you are likely to get and, hopefully, this will mean more potential customers contacting you on a regular basis. A website is also a great way to promote a shop opening, product launch or event.

7) Whilst a website is a great way to promote your business you need to give people a reason to look at it. Some positive PR from local newspaper, trade magazine, blogs, social media, networking or good old fashioned leaflet drops will help get people interested in what you are doing.

8) Make sure you are keeping a record of what you are spending and, with luck, what money you have coming in. It may also be worth speaking to an accountant to check you are doing things correctly.

9) Go over your systems, check that you know exactly how you are going to process and fulfil orders. Document your processes and how you expect things to run. This will help ensure you can deliver smooth customer service and make it easier to take staff on if you experience high demand. It’s not very exciting but it will help you to be more professional.

10) Once you have all of the prep-work done you can start doing the hard bit and open for business.

Why we don’t provide Company Seals

Limited Company SealAbout once a month someone asks us to provide them with a company seal or company stamp. Unfortunately we have to explain that, unlike some other company formation agents; we don’t provide company seals as part of our formation packages. Our reason for not offering them is quite simple. They have not been legally required by companies in the UK for over 20 years.

All UK limited companies used to be required to have a seal which had its company name “engraved in legible characters”. The use of this seal was required on all contracts, deeds and share certificates. Originally the seal would be pressed into melted wax but during the 19th Century rules were relaxed so that the seal could be placed directly onto paper.

The idea behind the seal was fairly simple. It was a clear indication of action on behalf of the company. The use of the company seal (and there often would only be one seal) meant that the company had come to a definite decision. For many years UK common law held that a seal was necessary for contracts to be valid.

These rules have now been done away with. Initially in the 1989 Companies Act and then in the 2006 Companies Act the use of a company seal was made optional. Section 45 of the 2006 Companies Act states that “a company may have a common seal, but need not have one”. Where a seal used to be required for contracts to be valid section 44 of the 2006 act states:

(1)Under the law of England and Wales or Northern Ireland a document is executed by a company—

(a)by the affixing of its common seal, or

(b)by signature in accordance with the following provisions.

(2)A document is validly executed by a company if it is signed on behalf of the company—

(a)by two authorised signatories, or

(b)by a director of the company in the presence of a witness who attests the signature.

So a seal is no longer required. You can make a document valid by having it signed instead. As this does not involve the heating up of blocks of wax signing is generally an easier option. If you want a bit of theatrical flair then you can still get a seal from lots of stationers but it is becoming increasingly unusual to see them used. Their use if likely to decline even further as online transactions become the norm. So that is why we don’t provide company seals. You don’t have to have one and very few people still use one.

Director Service Address – Protecting Your Privacy

Director-service-addressThe Companies Act 2006 implemented a change to the law which came into effect from the 1st of October 2009 with regards to the personal and company address details for businesses seeking registration as a limited company with Companies House.

The new rules state that all company officers (directors) must have 2 addresses registered with the registrar. These addresses are the private residential address of the director and the service address.

Protecting The Directors

The reasoning is simple. Small businesses often start off from a private residence and therefore directors were previously required to give their private home address when registering. This meant that their address and personal details would be freely available to the public upon request.

In order to protect a director’s personal information the law was changed to allow a director to enter a “service address”. This service address is the address which will be available to the public. While the residential address will still need to be registered, it will only be available to specified public authorities (the police and HMRC) and certain credit reference agencies.

So, if you’re starting a new limited company you may enter a service address which is different from your personal residential address in order to protect your privacy. Of course, there is nothing to stop you submitting the same address for both if you don’t have a service address or are not concerned with your private data.

Registered Office Address?

More often than not, people starting a new limited company don’t have access to a separate service address. If you are in this situation, but still wish to protect your private residential address and keep it away from prying eyes you may use a Registered Office Service.

This service is provided by us to help protect your personal details and maintain a professional edge to your business. You can simply register our address as your service address and we will forward your statutory and official government correspondence to your personal address.

Related Reading:

Protecting Your Company Name

protecting-company-nameObviously starting a limited company you’ll be putting a great deal of work and effort into your business. You won’t want someone stealing your goodwill or taking advantage of your good name. Which is why it is important to protect your company name.

Companies House Registration

Starting a business, you can get some protection for your company name by registering a limited company with Companies House (the registrar in the UK). Registering a limited company in this way will prevent other people from starting a company with the same name. This is one of the advantages of a limited company – a sole trader would not get the same protection for his or her business name.

However Companies House registration does not provide absolute protection.

Trade Mark Registration

The Intellectual Property Office states that:

Company law is different from trade mark law. You cannot stop someone using a trade mark, which is the same or similar to yours, just by registering your name with Companies House.

It is perfectly plausible that another business has already registered your chosen company (or business) name as a trade mark. This could cause headaches in the future, if they take legal action against you to get you to change your company name. This is why we recommend carrying out a trade mark search before starting the company formation process to register a limited company. It is better to be sure that your company name is available for registration (and protection) on all fronts.

When choosing a company name it is also worth bearing in mind the IPO’s statement that:

We cannot guarantee that the name of a company accepted for registration at Companies House is acceptable by us as a registered trade mark.

You will need to think about these factors when picking the perfect company name.

Domain Name Registration

Similarly, registering your business as a limited company does not automatically give you the right to the domain name. Another person or business may well have registered the domain name previously and failing to realise this will prevent you from a web address which is relevant to your company name. Of course, you could register a different domain name, but you might risk losing customers to this other business by accident.

Before choosing your company name, we recommend deciding on a suitable domain name and making sure it is available (you can do this using our domain name registration tool). Remember, if you want good amounts of traffic, it is important to pick a domain name which is memorable, easily typed and not easy to accidentally misspell.

Protect your company name today with support and services from The Company Warehouse!

5 Reasons To Start Your Own Company

start-a-company-sucess2011 has just started and we’ve all made New Year’s resolutions, perhaps you’ve been thinking about starting your own business, but for whatever reason that didn’t make it onto the list. There’s no need for it to just be a dream. You could own and run your own limited company and you could get started today. Here are 5 reasons why you should!

Be Your Own Boss

You’re stuck in a dead end job, unappreciated and undervalued. Perhaps you’re just working to make ends meet. Starting your own business, you could do so much more. Being your own boss would give you the freedom to follow your dream, do what you really love and do things your way.

Starting a limited company would protect you from unwanted liability and allow you to take advantage of the tax free benefits offered by the limited company form – cutting down costs and increasing the money you could potentially earn through your business.

Money, Money, Money

Of course we all want more money. Starting your own limited company, you’re more likely to make more money in the long run. No longer will you be spending all your time lining someone else’s pockets, your hard work will pay off and you’ll be able to reap the financial rewards. We’re not saying it will be easy, but the effort is certainly worth it.

Change Your Life

No more 9-5 in someone else’s offices, no more long commutes, no more jumping through other people’s hoops. Starting your own business will change your life. You can set the goals, work the hours you want to work and follow your dream.

Your Future

Carrying out a company formation allows you to start a business which is a separate legal entity from yourself. This means that your business will survive into your future and be a part of it. Even if you decide to retire, your business will live on. Starting a company is an investment in your future. The effort you put into your new company will pay rewards in the long term.

It’s FREE!

Forming a new limited company through us is not only easy, it’s quick as well. We’ll register your company within a few hours. Usually company formation is completed on the same day and best of all our service is completely FREE!

Buy an Existing Business or Start Your Own Company?

Buying an existing CompanyIf you are thinking about starting your own business, you might be presented with a number of potential opportunities and options. Not least of which is the form your business should take. You might even be in a fortunate position of being able to take over someone else’s business. People often look to retire or move on, they might simply be looking to sell their premises or perhaps they’re thinking about selling the business as a whole. The question is would you be better off buying an existing business or starting your own limited company? There are merits to both choices.

Advantages of Taking Over a Trading Business

Taking over an existing business might be an option for you, but what are the advantages and disadvantages? There are a number of potential advantages to buying an existing business rather than starting your own from scratch:

  • Security – The obvious advantage of buying a business that is already trading is the security. Taking over an existing business is far less risky than starting entirely from scratch.
  • Track Record – An established business is likely to have:
    • A good customer base,
    • A healthy credit rating
    • Good accounts,
    • Existing relationships with suppliers; and
    • Some sort of establishment within the community.
  • Employee Experience – An existing and trading business is likely to have experienced employees available to help run your company. They will be able to teach you what you don’t already know about your new undertaking.
  • Existing Cash Flow – Unlike starting your own business, buying an existing business means you can rely on cash flow right from the start. There will be fewer struggles trying to reach break-even point and keeping your business afloat.

Of course you will need to do thorough research to ensure that this is the case. Last thing you want to do is buy a business with a bad reputation which you can’t turn around or purchase a business with serious debt problems.

Disadvantages of Taking Over a Trading Business

The disadvantages of buying a business are equally obvious.

  • Cost – You will probably pay a premium to buy an existing business. The owner will have spent time and money building the business and they won’t want to sell at a loss.
  • No Guarantees - There are no guarantees of success. Just because a business has been trading doesn’t mean it has done so successfully, nor that you will if you take over. It might be based in the wrong location, have a poor client base, bad debt and many other potential problems. You also don’t know about potential legal issues – are there any copyright or trade mark claims against the business? Is there outstanding debt? How is the relationship with suppliers?
  • Learning Curve – Even if you know the industry, you won’t necessarily know the business. Taking over someone else’s business means you will have a lot to learn. Working out how the business operates, what its failing are, potential pitfalls and dangers. All of these things will take time.
  • Fixed Furniture – Buying a trading business means you’re taking on already existing and established practices, people and places. You might be required to keep existing employees on or use the established suppliers, which could work to your detriment. You may not be able to make the business your own in the same way that you could when starting from scratch.
  • Research – You will need to carry out thorough research before purchasing an existing business; otherwise you risk taking on a potential hazardous undertaking.

Alternatives To Buying a Business

There is another alternative to buying an already trading business. You could buy a dormant or vintage company – a company which has already been established and registered with Companies House but never traded. These kinds of company have some of the advantages of existing businesses without the potential disadvantages. For more information see our article on the advantages of vintage company registration.

Starting Your Own Company

Quite often people realise the most preferable option is to start their own business or carry out a company formation to register a new limited company. The advantages of limited company formation speak for themselves. But what are the advantages and disadvantages of starting from scratch?

Advantages of Starting Your Own Company

There are a few advantages to starting your own company rather than buying an existing one:

  • Making it your own – Establishing your own company from scratch allows you to make it your own. You can run it how you want (within the boundaries of the law) without needing to conform to the expectations of an existing customer base, current employees or suppliers.
  • Lower costs – Although it won’t be cheap to start your own business and grow it into a success, it will probably cost less than purchasing one that already exists. Costs will also be traceable and you will be able to manage where you are investing your finances.
  • Clean slate – Starting from scratch there is less risk of unexpected problems, debts and issues hidden by someone selling you there business.
  • Flexibility – You can make the business plan and do the research, then decide on the best possible location for your business, who to hire (and fire), what equipment to buy, which suppliers to use and much more. Starting your own business you can be as flexible as you like.
  • Your brand – Starting your own company allows you to choose your own business brand- Pick a suitable logo, establish a set of principles, work on your own look and feel. All of these things will already be decided for you and well-established when buying an existing business.

Disadvantages of Starting Your Own Company

There are some disadvantages to starting from scratch. They’ve probably already crossed your mind.

  • Risky – Starting a business from scratch is obviously risky. You will need to build you business, establish a client base, balance the books and market your goods and services just right if you hope to survive, never mind turn a profit
  • Hard work – Buying an established business won’t mean there’s less work, but starting from scratch will involve a lot of hard work to turn your business idea into a success.

It’s best to thoroughly weigh up your options before you get stuck into business. Here at The Company Warehouse, we’re determined to make things easier for you, which is why we’re offering FREE Company Formation to everyone looking to start a new company of their own.

Further Reading:

What Does It Mean To Be Struck Off?

Strike-offWhen you carry out a company formation to start a new limited company, the company is placed on the Companies House register. There are some circumstances where a company may be removed from that register. This is known as a “strike off” because the company is struck from the register.

There are a number of ways your company may be struck from the register:

Voluntary Strike Off

If at some point you decide you no longer want to carry on in business then you can apply to Companies House to have your company voluntarily struck from the register. This is done using Form DS01 and submitting directly to Companies House.

Companies House have some checks to ensure that companies are not seeking a strike off inappropriately. This includes requiring that:

  • Your company has not traded in the last 3 months
  • You have not changed the company name
  • You have not disposed of any assets inappropriately
  • You have not done anything which would impede the strike off.

Non-Operating Strike Off

According to Section 1000 of the Companies Act 2006, where Companies House has reason to believe that a company is not operating or carrying on business, then it may (once the proper procedures have been followed) strike that company from the register.

This may occur in some instances where a third party has reported a cease in trading or for other reasons. If a director of the company wishes to, they may apply to show that they intend to carry on business with the company and prevent it from being struck off.

Non-Compliance Strike Off (Accounts)

A limited company is required by law to submit the proper accounts and annual return each year. This is simple accounting compliance and failure to properly file these accounts can lead to a company being struck off the register.

Insufficient Directors

There may be occasions where a company is left with insufficient directors in order to legally operate. By law a private limited company is required to have at least one director, while a public limited company needs two. Sometimes people go into business together, only to fall out at some point in the future. Both parties may try to resign as company director by (this can be done voluntarily by submitting Form 288B) in which case the company will be left without the necessary number of directors and the registrar will take action to strike the company from the register.

Theoretically, if a company was run by a single director who then died before appointing another director, this is another circumstance where a company might be struck from the register.

Non-Natural Directors

The Companies Act 2006 put in place the legal requirement that a company must have at least one “natural” director – in other words, a human being of at least 16 years of age. Although it is possible for another company to be the director of a limited company, they cannot be the sole director. So any company which had a sole director aged less than 16 years old or was a company as of the 1st of October 2010 could be struck from the register. It is essential that every limited company have at least one natural director of the correct age to avoid these unnecessary complications.

Potential Fraud

Where a director or the company as a whole has operated in such a way that it has wrongfully traded or committed fraud, then it may be possible that the company will be struck from the register. In the same way, a person may object to a company voluntarily dissolving where this is the case.

Company Restoration After Strike Off

It is possible for a company to be restored to the register after a strike off has occurred under certain circumstances. This is known as a company restoration and requires certain criteria to be fulfilled. Contact our company restoration team on 0800 0828484 for more information and guidance.

How To Register a Limited Company

how to register a company

So, you’re thinking about starting your own business, you’ve weighed up the advantages and disadvantages and decided that registering a company is the best option for you; but how do you go about registering a limited company?

Registering With Companies House

In order to register a limited company, you need to submit all the necessary forms and documents to Companies House. But before you can get to that point you need to follow these steps:

  1. Decide on the structure of your company, who the directors and shareholders will be and how it will be run.
  2. Choose a company name and carry out a trademark search to ensure no one else has already registered it.
  3. Download and print out Companies House form IN01 fill it out thoroughly, making sure to get the signatures of all the directors and members.
  4. Buy suitable template Memorandum and Articles of Association (usually around £20-£30) and complete as appropriate.
  5. Post your completed IN01 form and Memorandum and Articles of Association to Companies House, along with a cheque for £20 (8-10 days completion) or £50 (same day service) :
  6. New Companies Section
    Companies House Crown Way Cardiff CF14 3UZ

    We recommend using a recorded delivery service to ensure your confidential documents arrive safely and on time.

  7. Wait patiently – it can take a good few days for your company registration to be processed by Companies House. If your application is successful, you should get a certificate of incorporation in the post after a week or two.

The Fast Free Alternative

There is another way – using our FREE company formation service means you can get your company registered usually within just a few hours in a few simple steps:

  1. Check your company name is available using our company name search tool.
  2. Select FREE Company Formation from our available company registration packages.
  3. Fill out our simple online form with your company details.
  4. Sit back and wait.

In most cases company registration is completed in around 2-5 hours and you can download your certificate of incorporation from the members area of our website using the login information you got during the registration process.

Once registered you can get on with running your new limited company! Order online today for a speedy, FREE company registration service you can rely on.

Free Company Formation

Bear in mind that from 2013 registration through Companies House will be online ONLY.

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