There is a lot of myths about UK company formation. This article will describe some of the most popular misconceptions about company formation.
- It is expensive to register a company in the UK - Registration of a UK company at Companies House requires a small government fee. There can be ongoing costs associated with running a business. And the cost will depend on the type of your business.
- Anyone can register a company - Though that would be true in many cases, this is not entirely correct. There are very few restrictions regarding who can be appointed as a company's director. Nonetheless, managers must be over 16 years of age and must not be an 'unloaded debtor'.
- It takes a long time to register a company - Historically, companies have been licensed by mailing paper forms to the Registrar of Companies. This method could also take weeks, even months if the forms that had to be corrected included errors. But now it is possible to register companies online. The test will take no longer than 15 minutes to complete with Companies House, or with a training agent. And the company can be established within 24 hours.
- All personal information will be made public - The corporate accountability encouraged by the public company registry is one of the major benefits of doing business in the UK. This provides confidence to investors, customers, employers, and other businesses alike in UK companies. Nonetheless, for different security purposes, there is some information that need not be publicly accessible. A company's registered office address and a director or PSC's service address are included in the Public Registry.
- It is better to issue a lot of shares - A common misconception is that a private limited company's real value is tied to the nominal value of the issued shares. The confusion may be caused by the ever-changing value for publicly traded limited companies that reflect a company's perceived 'real' value. A shareholder's responsibility is limited to the nominal value of the stock which they own. It is inadvisable to issue an unreasonable number of shares because this would expose the shareholder to unnecessary risk.
- A company secretary is required - Businesses had a legal duty to name a director until the Companies Act 2006 was enforced. But now, there is no such requirement. It is still possible to nominate a secretary. If no secretary is appointed, the conventional duties of a secretary of a corporation would fall to a company's director(s).
- You can use any name for your company - There are some laws and limitations which must be taken into account while choosing a name for a business. This is not possible to register a name that is too close to the name of an existing corporation. Using a word or phrase from another company name without any prior permission will be considered offensive.