Tag Archives: business registration in the UK

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The Economic Crime and Transparency Act (ECCTA) 2023, which was recognised as a law in October 2023 post receiving royal approval, has come into force since March 4, 2024. The new law introduces several changes to the Companies Act 2006, giving enhanced power to the Companies House Registrar to act as a proactive gatekeeper, scrutinise information and dispute it as needed.

These new changes will impact all new and existing company directors, People with Significant Control (PSCs) over companies, and any person who acts on behalf of a company. In this article, we discuss the key changes that this Act has brought in so that company stakeholders can prepare accordingly.Here are the key amendments to the UK Company Law that all new and existing companies should take note of:  

Key Amendments under the ECCTA Act – At a Glance

Giving an “appropriate” registered office address

As per the new changes, all new and existing companies should provide an appropriate registered address for their offices from 4 March 2024. The key points to note here are:

  • When a document is sent to the appropriate address of the company and when a delivery is made to this address by hand or post, it should come to the attention of the person acting on behalf of the company.
  • An acknowledgement of delivery should be recorded when documents are delivered to this address.
  • Companies can no longer use only a PO Box number as a registered office address.

For companies looking for help with registered office addresses, please check our address services and our team will be happy to assist.

Registered email address made mandatory

Companies House has now made it mandatory for all organisations to submit an appropriate email address for communication purposes from 4 March 2024. The key points to note here are:

  • When Companies House sends any emails to this registered email address, it should come to the notice of the person acting on behalf of the company.
  • All new companies should incorporate this registered email address at the time of their incorporation from 4 March 2024.
  • Existing organisations can inform Companies House of their registered email address in their next confirmation statement from 5 March 2024.

Statement of lawful purpose now mandatory

From March 4, 2024, onwards, all organisations (new and existing) should submit a statement confirming that their future activities would be lawful to Companies House. 

  • New companies should submit this statement at the time of application for successful incorporation from 4 March 2024.
  • Existing companies should submit the statement of lawful purpose in their next confirmation statement from 5 March 2024. Existing companies can take our help in filing proper confirmation statement in line with the amendments.

For more information, please refer to our confirmation statement service. 

Software-only filing of annual accounts

Companies House has decided to adopt the software-only filing process to streamline the annual accounts of organisations and make it more accessible and accurate. This process is expected to be rolled out across all companies in the next two to three years. While most companies already use software to file their annual accounts, some still follow processes like web filing, paper filing, joint filing online, and others. These processes will be phased out soon.

Change in the company name

The ECCTA has given Companies House the power to reject a company’s name if it is not in line with the new changes. According to the recent amendments, a UK company should register itself under a proper name. The key points to note here are:

  • Names of companies or LLPs (i.e., Limited Liability Partnerships) should not indicate that they might be used for unlawful or criminal purposes.
  • Names of companies or LLPs should not indicate that they may be connected to foreign governments or international organisations.
  • Names of companies or LLPs should not include any computer code.

For any help related to appropriate company name, you can speak to one of our company name change experts here.

Small company filing process amendments and audit exemption

According to the recent amendments to the UK Company Law, the annual accounts filing process of small and micro entities has been streamlined to bring transparency and clarity. 

The key points to note here are:

  • Filing obligations for small and micro entities to become clearer
  • Small and micro entities must submit a copy of their Profit and Loss Account at the time of filing annual accounts
  • Preparation of abridged accounts to be done away with
  • In case of filing more than one document,the process to facilitate filing of multiple documents at the same time
  • Small companies,dormant organisations or other entities claiming audit exemption to include a statement explaining the type of exemption they are seeking along with their balance sheet

New Identity Verification Process

Anybody who runs, controls, owns, registers, or manages a company should verify their identity with Companies House directly or indirectly through an Authorised Corporate Service Provider. For existing appointments, individuals can verify their identity after the transition period that the Companies House will announce. For new companies, individuals should verify their identity first and only submit the incorporation application.

Other amendments to the UK Company Law

  • Organisations can request that Companies House conceal personal information from the Companies House Register. These details can include the dates of birth, home addresses, signatures, and more. This will help to reduce the breach of confidential data.
  • Information on Limited Partnerships (LPs) will become more transparent than before. Companies House requires LPs to furnish all details about their partners, verify their identities, and submit valid office and email addresses as well as annual confirmation statements for this purpose.
  • All businesses will furnish a list containing the full names of their individual and corporate shareholders to Companies House.
  • All organisations will inform Companies House about their PSCs and Relevant Legal Entities (RLEs). If they want an exemption from furnishing this information, they should submit a statement explaining the relevant reason for claiming the exemption.
  • According to the new changes, companies can only appoint a UK corporate director if he/she has a legal personality.
  • While businesses should continue to maintain the Companies House Register for information on their directors, company secretaries, and PSCs, they can get rid of any internal registers (if any) of these same details.

Implications for Businesses and Stakeholders

Businesses and stakeholders will now have to be more careful while submitting or furnishing any information because the ECCTA has increased the power of Companies House to scrutinise the details and challenge it where ever needed. Companies House will now also have the right to reject any organisation’s request if the necessary information is not shared or a certain rule is not followed.

While some changes to the UK Company Law are being implemented from 4 March 2024 onwards, several changes are expected to come into effect in a phased manner over two to three years. Eventually, these changes aim to bring transparency and ensure that the Companies House Register holds trustworthy information about new and existing organisations.

Wrapping up

UK companies, new and existing ones, should take note of these new amendments to the UK Company Law and furnish information that conforms to the ECCTA requirements. This will ensure that the Companies House will not find any reason to reject their applications (in case of new companies) and confirmation statements (in case of existing ones). 

With the new ECCTA changes, the Companies House Registrar has greater powers to query and seek information, carry out thorough checks on company names, remove factually inaccurate information and crack down on wrong filings.

If the Registrar finds any discrepancies, inaccuracies or inconsistencies in the information submitted by the companies, they could remove the details of those companies from the register.  This is where we at Formations Hunt can help companies to submit accurate details to Companies House and prevent rejections.

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Registering a new company in the UK is a beneficial step that will secure a credible image for your business while ensuring multiple financial and tax advantages from the government. 

The purpose of this guide is to help you better understand how to register a company in the UK. The process is fairly straightforward, and within no time, you can have your legal entity registered and running in the heart of British commerce.

Why Register a Company in the UK?

The UK is one of the most sought-after locations for entrepreneurs looking to establish their businesses. Here’s why registering a company in the UK is a smart and strategic choice:

1. International Business Hub

The UK is a global leader in commerce and trade, offering unparalleled access to international markets. Its strategic location and trade agreements make it a prime destination for businesses aiming for global expansion.

2. Strong Legal and Financial Framework

The UK’s transparent legal system and supportive financial infrastructure ensure businesses operate in a secure and reliable environment. These frameworks provide a strong foundation for business growth and innovation.

3. Tax Benefits and Government Support

The UK boasts a competitive corporate tax rate, along with various government incentives and funding options designed to support startups and growing enterprises. These benefits can significantly reduce operational costs and maximize profitability.

4. Enhanced Business Reputation

Having a UK-registered company elevates your brand’s credibility and appeal, especially to international clients and investors. A UK registration signifies professionalism and trustworthiness, crucial for business success.

5. Simplified Registration Process

The process to register a company in the UK is straightforward and efficient. Entrepreneurs can easily incorporate their business within a matter of days, allowing for a quick start to operations.

6. Protection for Business Owners

Registering as a limited company separates personal and business liabilities, protecting owners’ personal assets from financial risks related to the business.

7. Access to Skilled Talent and Resources

The UK is home to a highly skilled workforce and world-class infrastructure, ensuring businesses have the resources they need to thrive in competitive industries.

Whether you’re a local entrepreneur or an international businessperson, the UK offers an ideal environment for establishing a company. By partnering with Formations Hunt, you can make the process seamless, ensuring your business gets the best start in one of the world’s top commercial hubs.

Prerequisites for Registering a Company in the UK

The registration process includes few basic steps to get your company incorporated successfully in United Kingdom

  1. A unique and distinctive name for your company, not very similar to another company name unless you have the letter of authorization available, always choose non offensive words however, some words need permission from the government bodies, these are called sensitive words like “King”, “Royal”, “British” etc.

  2. As per Economic Crime and Corporate Transparency (ECCT) Act come into force from the 4th of March 2024 one must provide a registered email address for a limited company or LLP.

  3. A primary office address, physical or virtual as your company’s Registered office address in the UK (must not be a PO Box or DX) as your company’s registered office address.

  4. Confirm that both the registered office address and email address are appropriate addresses. It will be the point of statutory and legal contact for Companies House, HMRC, and other official government agencies. This registered office address is made public as your company’s office address available on the company house website, letterheads, websites, and company official mail communications.

  5. At least one director who is a natural person aged 16 or above. 
     
  6. At least one shareholder who could be an individual (officer, director, PSC) or a legal entity.

  7. Memorandum of Association (MoA) and Articles of Association (AoA).

  8. Confirmation stating that the company will be used for lawful purposes (although this is not applicable to LLPs)

When registering a company, how do you know which type to choose?

The answer to this question lays the foundation for the type of company you want your business to be. In the United Kingdom we offer the following types of company registrations, and you can choose which structure resonates the most with the nature of your business.

Company Limited by Shares (‘Ltd.’ or ‘Limited’):

This is the most common and basic company type that people choose in the UK. If your business is a normal ‘for-profit’ business operating within the usual standards and practices of an industry and you don’t want the shares to publicly trade on the stock exchange, then you should choose a  company limited by shares.

Here, shares are issued to a few shareholders (owners), and the liability of the owners is limited to the value of the shares held. The minimum share capital allotment for a company limited by shares is £1.

Company Limited by Guarantee (‘Ltd.’ or ‘Limited’ unless exempted by law): 

If you have a not-for-profit business that serves social, charitable, community-based or other non-commercial purposes like sports clubs, charities, co-operatives, or membership organizations, you can register a company limited by guarantee.

These companies don’t have shares or shareholders but are owned by guarantors whose liabilities are limited to the amount guaranteed.

Public Limited Company (PLC)

You can register a public company if you have a for-profit business and want to sell your shares in the stock market. Ownership will be open to the general public. The allotted share capital for a PLC must be £50,000 or more, and at least 25% of it should be paid up. They should have a minimum of 2 directors and a company secretary.

Limited Liability Partnership (LLP)

If you have a professional partnership firm under an agreement, like accounting firms, solicitors, dentists, or doctors, then you can register it as an LLP to reap the benefits of limited liability. An LLP has a separate legal entity distinct from that of its partners.

The most popular company formed in the UK is a company limited by shares. 

We, therefore, structure the next section to focus on them.

What does the stairway to registering a company in the UK look like?

A registered limited company in the UK will fetch you multiple government incentives and simplify your business operations. The following steps will help you take the greatest strategic leap for your business.

Step 1: Running a search for your company name

You have to conduct a thorough name and trademark search for your company. The name should be unique and available for use. It should not have any ‘sensitive words or expressions’. 

In addition, the Company’s Act 2006 has a list of guidelines which should be followed to ensure compliance. If the name does not meet the requirements, then you have to come up with another option.

Your private company name must end with ‘Limited‘ or ‘Ltd.‘

Step 2: Appointing the director(s) and a company secretary 

Your company needs at least one director who will be legally responsible for its activities. 

The director must be a natural person, aged 16 or over, who is not disqualified by law from being one and is not an undischarged bankrupt. It is not a requirement for a director to be a resident or a national of the UK. 

The director should have an official service address / correspondence address where government mail directed to him will be delivered. Service addresses can be based anywhere in the world.

Appointing a local company secretary is not a requirement, but it definitely helps your business’ compliance procedures be smoother and hassle-free. The company secretary can be a director but cannot be the auditor of the company or an undischarged bankrupt unless they have attained the court’s permission.

Step 3: Recognising the People with Significant Control (PSC)

You should recognise the people who have a significant influence and control over your company. 

A PSC can be you, the directors, or shareholders who own more than 25% of the shares or voting rights or have the right to appoint or remove the majority of the Board of directors.

The personal details and the service address of the PSCs are required to be recorded in the PSC Register and included in the registration form.

Step 4: List of necessary documents 

There is a list of legal documents that are required during a company registration in the UK.

  • Form IN01: Includes name of company, registered office address, and personal details of directors, shareholders, and PSCs.
  • A registered email address for a Limited company or LLP.
  • Memorandum of Association (MoA): The constitution of the company, which includes the objectives and outlines shareholders’ rights and responsibilities. It is signed by all initial guarantors or shareholders.
  • Articles of Association (AoA): This includes operating guidelines for the company, such as details about shareholder meetings, how to appoint directors, etc. You have the option to use the model AoA provided by The Companies House or attach your own bespoke AoA.

Step 5: Selecting the SIC Code

You must select a Standard Industrial Classification of Economic Activities (SIC) code for your business. This code identifies the primary activities of the business. Visit the Companies House website (the executive agency under the Department of Business and Trade) to get the appropriate SIC code from the list provided. 

Register your business today with Formations hunt

With all the steps mentioned above, we are almost at the end of getting your company registered in the UK. All you have to do now is apply for your company registration in England with us online through our website. We as an authorised company formation agent, will take care of everything, starting from filing your new incorporation and collecting all the necessary documents from the Companies House (The official registrar of companies). You will be provided with a Certificate of Incorporation to confirm the registration of a company with an 8-digit CRN code confirming that the business is now legally registered with the Companies House.You’ll also get a share certificate,Memorandum and Articles of association and your web filing authentication code.

Why choose Formations Hunt to register my company ?

We, as a company formation agent, make things much easier when it comes to incorporating your new company online.

a) It costs much less than Company House paper filing .

b) You get access to all your documents online at one place through Our online company manager. We always remind you of your filing dates like Confirmation Statement ,Tax filing etc. so that you never face any fine or penalties.

c) You can always call and get help regarding day to day changes or updates you want to make in your company. We have listed some of the best services you might need after or during the company formation process :

  1. Registered Office Address
  2. Directors Service Address
  3. Business Mail Forwarding Address
  4. Confirmation Statement Service
  5. Directors Appointment Or Resignation
  6. VAT Registration
  7. PAYE Registration
  8. Company Secretary Service
  9. Business Email

The steps towards your entrepreneurship may sound tough as it demands a lot of attention to detail but that’s where we come into picture to make you feel burden free. At Formations Hunt, we guide you step by step with the entire registration process which makes you feel almost like an online shopping experience. 

Simply visit our website FormationsHunt and check all the company formation packages we offer for a Limited by share company and other company types like LLP, PLC, Non residents, Limited by Guarantee etc. 

If you are not sure, we have our friendly customer service representatives who can guide you through the ordering process over the phone at 020 3002 0032. You can choose the best limited company package suited for your business needs after comparing all the options at our Compare Package Page. We also offer all major payment methods ensuring unparalleled security. Please feel free to share all the necessary business details about your business with our skilled consultants and let us make Your business our priority.

FAQs

1. Can a non-resident set up a company in the UK?
Absolutely! Individuals who do not live in the UK can still register a company there. While there’s no residency requirement for directors or shareholders, a UK-based registered office address is essential for official correspondence.

2. What factors affect the time required to register a UK business?

The time frame for UK company registration depends on the method used. Online applications are typically processed within 24 hours, provided all required documents are accurate and complete. Errors or paper submissions can cause delays.

3. What should I do if my desired company name is already in use?
You’ll need to select a different name or, in some cases, secure permission to use a similar one. Conducting a comprehensive search for existing trademarks and company names beforehand is essential to avoid conflicts.

4. Is working with a formation agent worth it?
While it’s not mandatory to hire a company formation agent, partnering with one, such as Formations Hunt, can make the process of Company Registration in England seamless. Agents ensure compliance with legal requirements, minimize errors, and save you time.

5. Is it possible to modify my company’s details after registration?
Yes, changes such as updating directors, registered office addresses, or shareholders can be made at any time. These updates can be processed directly with Companies House or through a formation agent.

6. Why are People with Significant Control (PSC) important?
PSCs are individuals or entities with notable control over the company, such as owning a significant portion of shares or voting rights. They play a key role in company operations and must be listed in a public PSC register, which needs to be kept current.

7. Is having a UK bank account mandatory for my registered company?
While it is not legally required to open a UK bank account for registration purposes, having one is highly recommended. It aids in managing financial transactions, receiving payments, and maintaining transparency for tax-related matters.

 

What else can Formations Hunt help you with?

Apart from company formations and company registration-related services, we provide a plethora of additional services listed below :

Starting a business in the UK is an exciting journey, but ensuring a smooth and hassle-free process is crucial. Whether you are looking for Company Registration in England or want to Register a Business UK, it is essential to choose a reliable service provider. At Formations Hunt, we take care of all the legal formalities, document filings, and compliance requirements, making business incorporation simple and stress-free. Our expert team ensures that your company is registered correctly, allowing you to focus on growing your business.

Please visit FormationsHunt for more service details. Thank you.

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Starting a business is an exciting journey, and registering your company is a crucial first step. However, the process can sometimes be daunting, especially when facing rejections from Companies House. In this blog, we’ll cover the most common reasons why companies face rejections during registration and provide tips on how you can avoid them.

1. Similar Company Names

One of the most common reasons for rejection is choosing a company name that is too similar to an existing company. This includes variations of names that may confuse or mislead the public.

How to Avoid This:

  • Always perform a name search through Companies House to ensure the name is unique.
  • If your company name is too similar to another, you’ll need to select a new one, or you may get permission from the existing company to use it.

2. Sensitive or Offensive Names

Companies House does not accept names that could be considered sensitive or offensive. This includes names that might be associated with the Royal Family, government, or anything that could be deemed inappropriate or offensive.

How to Avoid This:

  • Avoid using terms that are controversial, sensitive, or have political or royal associations. This will help ensure your name passes the approval process. Click here to know more about it.

3. Errors or Missing Authentication Questions

Companies House requires applicants to answer authentication questions to confirm their identity. If you miss these questions or answer them incorrectly, your submission will be rejected.

How to Avoid This:

  • Pay careful attention when answering the authentication questions and make sure they are completed before submission.

4. Incorrect Registered Office Address

Your registered office address must match the region in which you are registering your company. For example, if you’re registering in Scotland, you must provide a Scottish address, and vice versa.

How to Avoid This:

  • Ensure the address you provide is valid and corresponds with the country in which your company is being registered.

5. Non-Residential Address for Directors

Although rare, some companies have their director’s residential address registered as a non-residential address. This can result in rejection.

How to Avoid This:

  • Always use a residential address for the director. If you’re concerned about privacy, consider using a Director’s Service Address to keep your personal address private.

6. Missing Nationality Input

Another less common rejection reason is when the nationality of the director or shareholder is incorrectly entered. It is important that this information is accurately filled out.

How to Avoid This:

  • Select the nationality of your director or shareholder from the drop-down list provided by Companies House.

7. Failure to Declare PSC (Persons with Significant Control)

A common error during registration is the failure to declare Persons with Significant Control (PSCs), especially when a shareholder holds more than 25% of the company’s shares.

How to Avoid This:

  • Ensure that all shareholders with more than 25% ownership are listed as PSCs. This step is essential for compliance.

8. Repeated Appointments

Sometimes, applications are rejected because a director is mistakenly appointed more than once. This might seem trivial but can still lead to rejection.

How to Avoid This:

  • Double-check your submission to ensure there are no repeated appointments of the same person as a director or shareholder.

9. S243 Exemption for Directors

The S243 exemption allows certain directors not to include their residential address on public records. However, this exemption doesn’t apply to all directors.

How to Avoid This:

  • Use this option only if it’s applicable to your case. Avoid selecting it unless you’re sure it applies to your situation.

10. Incorrect SIC Code

The Standard Industrial Classification (SIC) code defines your company’s business activity. If the SIC code is incorrect or not relevant to your business, your application will be rejected.

How to Avoid This:

  • Ensure that you select the correct SIC code from the official list. Easily achieve this with the help of experts like us! Click here for more details otherwise Call or chat with us on WhatsApp at your convenience, and our experts will guide you step by step to ensure a mistake-free process. Join thousands of satisfied customers who formed their companies with the assistance of our dedicated support team and shared glowing reviews about their experience. Let our trusted customer care make your journey smooth and successful!

11. Missing Director’s Consent

You cannot appoint a director without their consent. If the consent is missing or invalid, your registration will be rejected.

How to Avoid This:

  • Make sure that all appointed directors have consented to their role. This is often done during the online submission process.

12. Errors in the Memorandum or Articles of Association

The Memorandum and Articles of Association define the company’s rules and governance. If these documents are incorrectly drafted or contain discrepancies, it can lead to rejection.

How to Avoid This:

  • Ensure that these documents are properly drafted and adhere to the required legal format. Consider using a professional service like FormationsHunt to ensure accuracy.

13. Inaccurate or Missing Share Capital Details

If the share capital or shareholding information is incomplete or incorrect, Companies House will reject your registration.

How to Avoid This:

  • Double-check the shareholding structure and the amount of share capital declared. Ensure that this information is accurate and clear.

14. Incorrect Director’s Personal Information

Your application will be rejected if any of the personal details of directors, such as their name, date of birth, address, nationality, or occupation, are incorrect. 

How to Avoid This:

  • Verify all the information for each director before submission to ensure there are no mistakes or inconsistencies.

15. Failure to Provide Identity Documents (For Non-Residents)

For non-residents registering a company in the UK, failure to provide identity verification documents may lead to rejection. 

How to Avoid This:

  • Be prepared to submit the required identity verification documents if you are a non-resident. FormationsHunt can assist you with this process to ensure smooth registration. Click here to learn more, or reach out to us for personalized support.

16. Not Meeting Legal Requirements for Directors or Shareholders

Directors must meet specific legal criteria. For instance, they must be at least 16 years old and cannot be disqualified from being a director.

How to Avoid This:

  • Ensure that all directors and shareholders meet the legal requirements. Verify that none of the directors have been disqualified.

Final Thoughts: How to Avoid Rejection

Navigating the company formation process can be complex, but by paying close attention to the details outlined above, you can significantly reduce the risk of rejection. If you’re ever in doubt, it’s always wise to consult an expert who can help you through the process seamlessly.
At FormationsHunt, we provide comprehensive support for company formation and ensure that all your documents are in order before submission. Our services also include a pre-submission review to help you avoid these common mistakes and guarantee a smooth process.
Start your business journey with confidence and avoid the stress of rejections. Contact FormationsHunt today and let us guide you every step of the way.