UK Company Formation: A Crucial Step for the Operation of Any UK Based Business

UK Company Formation: a crucial step for the operation of any UK Based Business

Are you going to start a business venture in the UK? Whether you are a new or an existing business, forming a UK company is an incredibly effective way to give an identity to your business and establish a presence. UK company formation comes with added advantages. You may enjoy reduced financial liability for your company debts, and you may sell shares to investors to raise capital


Here are some additional advantages of forming a UK Company, whether you are a first-time entrepreneur or an existing company or business.

  • With a UK company, you are only liable up to the nominal value of your shares.
  • Forming a company can help in boosting your professional profile.
  • You can create a brand for your business which can portray the image of a trustworthy and established entity.
  • There are tax savings and incentives for UK Limited Companies.
  • UK Ltd companies exist beyond the life of the original owner. The business exists unaffected after the departure of the original owner.
  • Having a UK company can open new markets for you especially in places such as Europe where there are limited barriers to entry for UK Registered Companies.


There are some disadvantages:
  • You will need to pay fees for Companies House registration
  • Information relating to the Company is accessible by the general public e.g registered address, name, and correspondence address of Directors and Shareholders.
  • If your director is bankrupt or disqualified, you could face issues.

The Process of Opening a Company

For company formation in the UK, there is a process. You need to register your business with Companies House. After this procedure, your business becomes a distinct legal entity in the UK. After registering your business in the UK, you become an independent business entity in the eyes of the law. Your company is distinct in terms of finances, liabilities, and contracts, including ownership of property and assets.

Here is a short overview of the procedure to follow when opening a company.
  • Choose your business name and UK address.
  • Register your business with Companies House.
  • Appoint at least one Director and 1 Shareholder. You may also appoint a secretary.
  • Corporation tax registration. Companies House usually does this automatically by passing your details to HMRC.

Business Formation in the UK Through a Company Formation Agent

Choosing an agent for your UK company formation is recommended. Filling in lengthy forms can often be confusing. Agents have the necessary skills and experience to register your company in the UK and usually charge a nominal fee of anything between £15 and £30 for the service.

Thinking of a Name for Your Company

A good name for your company can have a significant impact on your business. Try and find a catchy name for your business. It should be easy to spell and should represent and explain your brand as best as possible.

Obtaining a Bank Account

Though having a business bank account is not necessary for the purpose of forming your UK company, you will surely need a bank account at a later date for general trading purposes. An agent may offer you help for this process alternatively you can approach any UK High Street Bank. Most of them provide Business Banking services.

What Address Should you Use to Register Your Company?

Having a registered business address is also compulsory for any UK Limited Company. Many small businesses and startups initially operate from home in which case their residential address becomes visible to the general public via the Companies House website. Your privacy may be adversely affected if you register your company to your private address in the UK. It is sometimes better to use a UK virtual address or set up a UK Virtual Office. A quick Google search should reveal lots of companies providing virtual business services.

Alternatively, if you use a company formation agent to set up your company you can enquire if they can also provide you with a virtual registered trading address.

Hiring an Accountant

You will need to hire an accountant to manage the regulatory filings for your newly formed company. This includes your annual company accounts and corporation tax returns. Accountants can also advise you on financial planning and give guidance on the registration and payment of VAT.

Matt Price is a blogger and speaker who enjoy enlightening others about unknown and little-known facts. Matt is the owner of Icon offices and we provide luxury serviced offices, virtual offices, meeting rooms and shared rooms in a cheap rate in East London Essex. We also offers cheap UK company formation service and accountancy services.
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