Forming a new UK company which used to be such a daunting task earlier is much easier today, thanks to company formation online registration portal. 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.
Wrong company type
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 good idea to take professional help before you make your choice.
Watch out for typos
It is very easy to let typos or spelling mistakes sneak in when you do it online especially when you register your company from a mobile phone or a tablet. Even though fixing typos are easy, it incurs a charge at the Companies House and can have unintended consequences. For example, a typo in the company name could well imitate an existing company. The last thing you’d want at this stage is to find yourself facing a litigation.
Not correctly completing PSC register
On 6 April 2016, new law came into effect that requires all companies to keep a register of the people who can influence or control a company, that is, the PSC (persons of significant control of the company). PSC are popularly referred as the “beneficial owners” of a company. Any person who owns more than 25% of the company, holds more than 25% voting rights, or has the right to appoint or remove directors is a person with significant control (PSC). You must select the PSC box even if any one of the condition is met.
Not choosing the ‘Standard Article’
When you register a company, you will have to define the way the business will be run. It is quite easy to interpret this as defining how the company will operate on a day-to-day basis, when in reality, it defines the voting share and other operational responsibilities. So, when you set out the Articles of Association, it is always a good idea to go with the ‘Standard Article’. If you make changes to the draft, you cannot register online and will be required to post the application to the Companies House.
Not adding names of all shareholders
When you register a company that you share with others, then their names must be included. Though their names can be included at a later point in time, it is a good practice to include all of them during the initial stage itself and define the number of shares. Doing this correctly will place them on the memorandums of association.
With just a little bit of caution, it’s very easy to avoid these mistakes. Doing it right saves the you time, money and unnecessary hassle.
When you register with Mint Formations, you can choose to buy our pre-submission review service during checkout. For just £5.99 you can get our company formation experts to thoroughly review our application, correct any errors and then submit your application with Companies house.