Why use a company formation agent?

In some situations, businesses attempt to incorporate companies or register partnerships directly with Companies House, which takes time and trouble.

Furthermore, such attempts are not always successful, owing to mistakes that are often made on the application form and other documents or to a lack of awareness of details that are essential in the incorporation procedure. In order to solve these problems, however, businesses may engage a company formation agent.

What is a company formation agent?

A company formation agent is a professional or firm of professionals with knowledge and experience of corporate law who is authorised by Companies House to execute the formation of companies and provide also a range of associated corporate services.  Using a company formation agent affords one an easier, clearer and more efficient process and reduces the potential for filing errors that may lead to a number of problems, including the rejection of applications by Companies House.

For example, you must always fill in the “People with Significant Control” (PSC) section of the application with details of the PSC or PSCs of a company or partnership.  Companies House may reject the application if it finds that any PSC detail such as the country of residence, the nature of control or any other information is missing from the form. 

To avoid rejection, however, a company formation agent scrutinises the application carefully, checking its accuracy and completeness in this and all other areas, and – as and where necessary – corrects it before filing the application.

An Introduction to Company Formation in the UK

The advantages of using a company formation agent

There are advantages in at least five main areas to using company formation agent services, rather than trying to incorporate a company or register a partnership on one’s own, even through a Companies House web form.  These advantages are as follows:

Choosing Type of Business

Professional assistance in choosing a suitable legal form for business.  For example, one person cannot register an LLP because this legal form requires at least two distinct members in its structure.  Without a second business partner, such a person can apply only for registration of a limited company.

Company Name Check

A fast online check for the availability of name upon the register and advice on whether the chosen name may require special permission from Companies House.

SIC Codes

Assistance in choosing a suitable SIC (Standard Industrial Classification code) that corresponds closely enough with the proposed business activity.

Rapid Registration Procedure

A company formation agency uses special software to deliver applications and other documentation to Companies House and to pay incorporation fees online on behalf of the client.  The procedure through a company formation agent is therefore not only far quicker and easier than completing applications on paper oneself and sending them by post but is even quicker, more direct and more trouble-free than web incorporation.  Indeed, a company may often be incorporated, without any problems, on the very same day that the application has been made.

Company Formation Documents

Upon the company’s incorporation, one gains access to a comprehensive suite of digital corporate documents. These crucial company formation documents include the Certificate of Incorporation, the Minutes of the First Meeting of Members, the Memorandum & Articles of Association (M&AA), the Share Certificate, the Register of Directors, and the Register of Members. The company formation agent is well-equipped to file either the Model M&AA approved by Companies House or a specific M&AA tailored to suit the client’s unique needs.

Low Costs

When compared with application by post, using a company formation agent’s services not only saves one time and trouble but can also reduce one’s expenses significantly.   If you apply by post, you need to pay postage fees and a higher incorporation fee (£40) established by Companies House for paper applications.  In sharp contrast to this, the total price for all of the basic services of a company formation agent can be as low as £14.99.

How Much does it Cost to Set Up a Limited Company?

Additional Services

The advantages mentioned above cover the minimum actions needed in order to incorporate a company and these actions are included in the basic services of a company formation agent.  In most situations, however, conducting business requires more administrative assistance, such as the provision of an address for specific purposes.  In order to afford one such assistance, a company formation agent offers a range of additional services, including:

Registered Office Address

There is a statutory legal requirement that all companies and partnerships across the UK must have a Registered Office Address within the UK.  This address will be placed on public record at Companies House.  By ordering the additional service of a Registered Office Address, a business need not search for an address of its own or use the home address of its directors or members as its Registered Office Address. 

The company formation agent is authorised to offer its own office as the legally Registered Office Address of the client’s company or partnership, which ensures confidentiality for its directors and members.  Post from government departments and agencies such as Companies House and HMRC will therefore be sent to the office of the company formation agency, who will then forward it to the client.

Service Address

There is also a statutory requirement for officers, members and PSCs of a company or a partnership to provide Companies House with their correspondence addresses (which do not necessarily need to be within the UK).  This correspondence address may differ from the Registered Office Address but it will also be publicly available through Companies House. 

For this purpose, the company formation agent may provide the clients with a Service Address for several or all persons involved in the company or partnership structure. This may be the same as the Registered Office Address of a company or partnership.   The governmental mail addressed to a company/ partnership or its officers/members/PSCs will be received by the company formation agent and forwarded to the client accordingly.

Business Postal Address

The provision also of a Business Postal Address by the company formation agent includes receipt by the agency of all incoming paper correspondence, i.e. not only that from government departments but also from the company’s clients, business partners, counterparties and suppliers, and forwarding of it to the company.

VAT registration assistance

The company formation agent can complete and file VAT application forms with HMRC on behalf of a company and trace the application’s progress by contacting HMRC.  Furthermore, the company formation agent can also instruct on how to create an HMRC Government Gateway account so that the company’s tax can all be administered online.

Support in setting up a bank or a payment institution account

The company formation agent liaises with banks and payment institutions and – if you so choose – will provide the bank or institution with your contact details during your application to incorporate a company.  This option allows the company to begin to operate as soon as possible, since one need not search for a bank or payment institution and then, once again, provide all of the company’s details.

Universality

As can be seen, the wide range of services that are offered by a company formation agency, all “under one roof”, makes it a universal administrative assistant that deals with different issues which arise in the course of your company’s business:

  • Professional advice in selecting a legal form and name;
  • Quick company formation;
  • The dispatch of the entire set of digital corporate documents;
  • The provision of addresses for different purposes;
  • The receipt and forwarding of correspondence and various other functions. 

You will not need to search for different providers of different services since they are contained within one package.


By choosing an appropriate incorporation package you may delegate to the company formation agent the level of administrative and legal work and support that you choose to demand from them, not only at the time of incorporation but on an ongoing basis, . . . so that you can dedicate yourself entirely to your business.

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