Top tips on choosing a company formation service provider

In a previous post, we explored how in recent years the company formation process has become faster and slicker.

Whilst all this is true, it’s easy to make sacrifices at the altar of convenience. Forming your own company is an important step to take and carries with it serious, legal obligations. So, before you click "OK", consider these factors:

1.  Make sure your choice of company name is available. Sounds simple doesn’t it? But this single aspect of the formation process can be a minefield even for those in the know. Companies House has introduced complex rules regarding same/similar names, plurals, symbols and terms requiring justification. 

A reputable company formation provider should allow you to check your company name online for free before you order. If they don’t, don’t bother. If they do, check a few and compare the results, particularly if your name requirement is not straightforward. 

To avoid problems later on, a good quality check should take in at least three different criteria:

  • Companies House database for official, up-to-date information checking identical names
  • Sensitive names and terms requiring justification or third party approval
  • An additional detailed check to take account of special character exclusions

You should also be able to speak to someone knowledgeable in the event of your having a more complex name requirement. Not all company formation providers offer the option to speak to a team member via phone for assistance.

2. Make sure your company will be fit for purpose. The articles of association of a company are the provisions which regulate the affairs of the company. They will also contain regulations about shares and share rights, appointment and removal of directors and the mechanics of calling and holding board and shareholders’ meetings, as well as other administrative matters.

Since their recent introduction, many providers simply adopt the model articles. Whilst these may fit the bill in many instances, check that they meet your needs. And if not, check that they can provide you with a company tailored to your requirements.

For instance, within a family company you may want certain members to have different voting rights.  Or you may want shares in another currency.

In short, make sure you get the company you need at the outset - changes later on could be complex and costly.

3. Get the service you want.  An electronic process shouldn’t mean you have to compromise on service.  If you’re confident enough to go it alone online, that’s great (just make sure you’ll receive some sort of “are you sure?” – a chance to check before your company is formed).  But a good service provider should take steps to understand your needs and respond to them. So, if a real person at the end of a proper (not premium rate) telephone is what you prefer, make sure it’s available to you before you commit. 

4. What happens if something goes wrong? The acid test of any service is when things go wrong. True, this is the hardest area to check in advance. At the very least, your chosen provider should be happy to provide you with a named contact along with direct telephone number and email address. In turn, your contact should be in a position to liaise with Companies House on your behalf.

These are our recommendations for choosing your company formation service provider. Get your formations right. The first time. Every time.

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