Top Mistakes to Avoid When Registering Your New Company Online: A BusinAssist Guide

The evolution of technology has made it easier for entrepreneurs to register their company from the comfort of their home or country. Over the years, company formation agents have made it easier for business owners to form their company online bridging the gap between entrepreneurs and the process of incorporating a company in a new country.

Though the technology evolution has made it easier to incorporate a company without the need of filling in lots of forms, it is easier to make mistakes if you are not careful or haven’t done enough research of what is needed.

This article will highlight the biggest mistakes people make while registering their company online and how you can avoid them.

Big common mistakes companies make during registration process

Incorrect company names

A company name holds significant importance as it represents your business and establishes its identity among competitors. Business owners should select a name that is distinctive, unique, and compliant with the rules and regulations of the country where the company will be registered.

For instance, if you are registering your company in the UK, you will need to consider the guidelines mentioned below while selecting your company name:

• The name should not be offensive
• Some sensitive words / expressions require prior approval from the relevant authorities
• The name cannot be same or too similar to that of an existing company
• The name should only contain permitted character and punctuations
• The company name ending should include the structure you have chosen, for example, if your company is a private limited company the name must end with “limited” or “LTD”, a public limited company must end with “PLC”.

Failure to secure intellectual property

When starting up a company, business owners tend not to see the importance of obtaining security for their intellectual property. It is important to register trademarks for your company to protect the uniqueness of your brand. A trademark adds value to your business and it also prevents confusion among customers.

In regards to the trademark, a company must ensure that their logo, symbols, designs are not similar to the existing one. In the UK, a trademark cannot be a common surname or geographical name.

Company structure

You should choose a structure that aligns with your business goals and objectives. Startups in need of a UK limited company formation can either choose a public or private limited company. Both are limited companies but have differences such as;

• Public Limited Companies can sell their shares to the public while Private Limited Companies can only offer shares to a limited number of private investors.
• Public Limited Companies require at least two directors while Private Limited Companies can be formed with just one director.
• Public Limited Companies must appoint a company secretary unlike Private Limited Companies who can incorporate without one.
• Public Limited Companies face heavier penalties for late filing unlike Private Limited Companies.

These differences can help you choose a company structure that aligns with your business goals. There are other company structures such as sole trader, partnership, and limited liability partnership, a company limited by guarantee, etc.

You can typically form any company but make sure you do your research before settling for a structure. A sole trader company structure does not need to be registered however, you will be responsible for all the administrative work whereas, a limited company comes with tax benefits and better reporting responsibilities.

Wrong company address

A company address must be in the same jurisdiction where your company is located. You can use your home address to register your business however, it is important to understand that the address will be available to the general public through the official register.

If you are overseas and want to incorporate a company in the UK, you can use a virtual office to register your company. The London virtual office comes with a business address which can be used to register your company. For example, if you want to incorporate your business in the global business hub and financial center, London, you can purchase a virtual office in London and register your business.

Unnecessary directors’ appointment

Many startups often appoint unnecessary directors, which can lead to leadership conflicts and potentially harm the company’s stability and success. You should appoint directors according to the structure you have chosen. A public limited company must have at least two directors while a private limited company can be formed by one director.

A company should have a team of board members, shareholders do not necessarily need to serve as directors. Also make sure you mention all the shareholders your company has. Not clearly specifying the number of shareholders your company has is also a mistake that should be avoided. Shareholders should be included in the Memorandum of Association when registering your company or you can add them later.

Incorrect documents

Submitting incorrect documents will lead to the rejection of your application. You have to research the documents required to incorporate a company. If you are using a company formation agent, you can reach out to them to send you every document and detail they will need to help you incorporate your company.

In the UK, you will need Memorandum of Association, Articles of Association, and application to register a company (form IN01) if you are directly registering your company with Companies House. You will also be required to submit additional information if your application includes sensitive expressions or words.

Not registering your company for Corporation Tax

Incorporating a private limited company will require you to register for Corporation Tax. Companies should pay taxes to HM Revenue and Customs (HMRC) on profits in an ‘accounting period’.

Sole traders do not have to register for Corporation Tax since they pay taxes through the Self-Assessment system. All they have to do is register with HMRC as a self-employed person., Once you register for Self-Assessment or Corporation Tax, make sure you keep accurate records for your business transactions.

Keeping track of business regulations

Many new companies end up being shut down the first few years for non-compliance. Once an entrepreneur decides to register a company, they should research the regulations they must comply with and submit required documents to both Companies House, HMRC, and other government agencies your business is associated with.

Make sure you know the filing dates, which documents you must submit, and keep records. These are the responsibilities of company directors. If you are a director, you can appoint an accountant to manage annual compliance on your behalf. If you used a company formation agent to register your business, ask if they offer accounting services to help with administrative tasks.

In conclusion, all these listed mistakes should be avoided to make your business successful. With the help of a company formation agent like BusinAssist, you can incorporate your business hassle free without making any mistakes. They have experience and know what Companies House will need to be approved.

For more information you can contact them through info@BusinAssist.com.