A Guide to Conquering the Deterrent Barriers to Entry

27 March 2014

Here at eformations, we have built up a strong reputation as a company that provides top quality services when it comes to assisting business people with limited company formation. Our experts have helped an endless list of clients to establish their brand within respective markets over the years, and it is this experience that helps us to provide you with informative articles regarding the challenges that you might face within the business sector.


In modern day business, there are plenty of obstacles that can hinder business success, and many of these are experienced before and just after company launch. The technical term for such hindrances is ‘barriers to entry’. In this article, we will focus on discussing the barriers to entry that many companies typically encounter as they attempt to make a break through into the British industries; most of which are fiercely competitive.

Sunk costs: Investment and capital are among the longest existing barriers to entry in history. Cash is the issue during business start-up. For example, some industries will have a reputation for high sunk costs; meaning the new businesses are required to input hefty initial investments whose chances of return are minimal. This often deters many business starters. In order to overcome the possibility of financial difficulty, it is important to establish business investors who believe in your business concepts, and are willing to support your business.

Pricing barriers: These are common in industries with evenly distributed market shares. Lack of a market leader means different companies have the power to control prices, and strategies like loss leaders could result in new companies’ profitability suffering greatly. To overcome pricing barriers, raise brand awareness before market entry. It is also wise to time your market entrance. Scrutinise the market to avoid major pitfalls.

Product differentiation: Entrepreneurs usually find it very difficult to launch a company in an industry characterised by product differentiation. Established forces within the market will have their own variety of products that customers are loyal towards. Developing a unique product and investing into intensive brand promotion are both effective solutions, and can help you conquer any market hindrance.

public-limited-guarantee-ltdEconomies of scale: Similar to product differentiation, industries with reputable forces will deter entrepreneurs. Large companies tend to have the ability to control the market, meaning that costs like raw materials will be in their favour. It is difficult to compete with companies that have economies of scale. However, large financial backing can be the solution to this barrier. In such a situation, patience pays off. Start small and slowly expand, as this helps your brand to build on a strong foundation and minimises the risk of your business collapsing.

Research and Development Costs: As mentioned throughout this article, finance is a major factor affecting company formation. Lack of financial support could mean that the entrepreneur does not have the necessary resources to fund for market analysis. It is common sense that starting a company without industrial knowledge could mean disaster, as it is very rare that you will be able to devise a substantial business strategy this way. Although business experts recommend primary research, if you have insufficient funds then keep primary research to a minimum, and focus on using secondary information, as it is the cheaper option.

Encourage Corporate Prosperity Through Ethical Practises

24 March 2014

An increasing number of companies are being set up each year in the UK and with the economy in a very healthy state, it is inevitable there will be an influx of aspiring business people venturing into various markets. Despite favourable economic conditions, the process of company formation remains very complex. It is common to find that many entrepreneurs can be deterred from pursuing the dream of establishing their own company as they dread falling at the first hurdle: Company registration.


This why companies like us at eformations are available to take this company formation burden off your shoulders and help you focus on looking ahead and guiding your company towards prosperity. As a company that has been operating within this industry for many years, our rich experience has educated us about the other issues that entrepreneurs face, apart from company registration. These include practising ethical measures. Yes, you still have to play by the rules!

Since your company is registered under the Companies House, there are many ethical practises you have to incorporate into business strategy, not only for compliance purposes but to also raise your company’s profile through maintaining a clean brand image. At eformations, we have compiled a list of ethical practises that can help improve the reputation of any company in any industry:


Our area of expertise! As mentioned earlier, registering your company as a limited organisation means your company is listed within the Companies House’s books. This means you have to submit all your annual reports regarding corporate activities to this authority entity each year. In doing so, you are establishing your company as a trustworthy and ethical firm as you have nothing to hide.

Join Credible Memberships

Never forget that your business is always under the public eye. Your business associates can paint a public image for your brand, therefore it is wise to be cautious about selecting the right business acquaintances. Study other businesses’ internal values and external reputation to ensure that your own business’s reputation isn’t crushed before it’s even built.

Fair Trade

As mentioned earlier, your business is constantly under scrutiny so it always good practise to examine your associates before establishing a public relationship. Fair trade has always been a heavily debated issue and there are legislations in place to avoid unfair bargaining. Depending on the nature of your company, make sure your suppliers get a fair share for their part within the services and avoid overcharging customers. Failure to treat stakeholders fairly has facilitated the downfall of many brands over the years.


legalisation-approvedAlthough it might seem obvious, it is important to make sure you avoid copying other businesses’ branding to facilitate an easier market entry for your own brand. The professional company name check service that we offer can reduce the likelihood of this. In positive news,  a recent article indicated that the government is reducing the list of company names previously deemed sensitive, such as those containing the words ‘Board’ and ‘Authority’. If you include words on this list in your company name, you will need to get special approval as they can be ethically sensitive, so this reduction should make the process easier. Carefully choose your name to avoid being on the wrong side of the law.

Go Green

With many companies ‘going green’, this aspect of business ethics simply seems like a trend. However, it is more than this and businesses taking an environmentally friendly approach to their business procedures are highly regarded. Ensure your company shows its care for the environment to better your reputation straight after company formation.

So there you are, just some of the many ways you can drive your business to success through displaying exemplary values and ethical practises. If you wish to achieve your corporate goals, it’s wise to give something back to the people who use your services for they contribute largely towards your profitability. We can help you achieve these goals by helping you with the many aspects of company formation that our fully qualified team of employees have experience in. Contact us today on 02082325479 to make an enquiry.

4 Common Mistakes to Avoid When Forming a New Company

17 March 2014

Company formation is a very common process for entrepreneurs to show an interest in, and now it may well be even more prevalent due to the current optimism surrounding the UK economic climate. However, the procedure is littered with potential pitfalls, and many budding businessmen and women fall foul of one or more of these traps. Here are four of the most common mistakes that many people experience when forming a company.

Making an Error in the Director’s Date of Birth

This might seem an obvious point, but you’d be staggered at how often this actually happens. The occurrence is also far more troublesome than you might think, as an error in the director’s date of birth cannot be amended by virtue of a simple procedure like filling out another form. In fact, such a mistake will lead to an exasperating situation whereby the director in question will have to fully resign, just so they can then be re-appointed with the correct details. Seemingly inconsequential errors like this can prove difficult to revise, so double and even triple checking information is highly recommended.

Providing the Wrong Residential Address for the Director

Similar to the above point, and probably just as common, supplying incorrect details relating to the director’s residential address can be hugely problematic for a company formation. Although this mishap can be more easily dealt with after the company has properly been formed – usually by way of filling out a CH01 form – the unwanted repercussions can continue afterwards. Opening a bank account is a fundamental concern during the company formation process, and incorrect residential details for the director will greatly slow down your ability to open such an account, resulting in lengthy delays.

Discrepancies Over Registered Location

Another instance of flawed information, providing the Companies House with a misleading registered location is an all too common pitfall for many new entrepreneurs. A company that elects to incorporate in England or Wales, for example, will be wrongly incorporated if they list their registered office in Scotland on their online forms. This mistake will always be swiftly picked up by Companies House, but a perceived failure to rectify the concern (by registering an office address in the relevant location) will inevitably lead to Companies House striking the new formation off the Register.

Implementing the Wrong Structure

Most companies will be formed to make the maximum possible profit for their owners, and because of this the optimal structure might vary between cases. Often though, the exact nature of a company structure will virtually be decided for you, and sometimes you must adhere to a certain business model. For example, a charitable company needs to be limited by guarantee, and companies that choose to be limited by shares have Articles of Association that are incompatible with charitable enterprises. Mistakes in the area of formation frequently cannot be remedied easily; for example, a company limited by guarantee can’t later reform itself into one that is limited by shares. Your structure may well determine your success, so make sure you get it right sooner rather than later.

Many of the above mistakes might seem to be simplistic, but they are all too easy to be caught out by. That’s why at eformations we always take care of all of the details on your behalf, whether they are complex or simple, thereby ensuring that the entire formation process is smoothly implemented. Our prices are also hugely competitive, and sometimes even come free, so don’t hesitate to contact us to kick-start your company formation today.

High Expectations Ahead of the 2014 UK Budget

14 March 2014

The highly anticipated UK annual budget is finally set to be unveiled next week on the 19th of March. Chancellor George Osborne will present his budget statement to the House of Commons, showing how the government has decided to spend money over the course of the next fiscal year. Among those facing an anxious wait, largely to find out about how this national allocation of funding will affect them, are business people. This is because, prior to the statement being released, businesses wrote to the Chancellor proposing particular suggestions that favoured their respective industries.

It is on this day that they will find out whether their pleas have been answered or not. As a company that has experience in dealing with industrial aspects like company registration, we at eformations certainly expect an increase in business start-ups, as the government is most likely to allocate a considerable amount towards businesses to facilitate economic growth. The BBC has released an article containing what some of the different market sectors have asked for:

Manufacturers: This market sector has clearly underlined their needs through the Manufacturer’s Organisation, EEF. Manufacturing companies have proposed for closer analysis of the energy costs that they claim are harming business profitability. Skills Training Schemes, to develop employees’ expertise, were also part of the written proposal.

Large Scale Enterprises: Large companies have called for the government to revise the annual investment allowance, which lets companies offset spending against tax on items such as furniture or tools. Furthermore, scrutiny of the Air Passenger Duty is part of their plea, as multi-national companies claim flight charges are proving too much for the companies.

Unions: The Trades Union Congress has also put forward a written proposal to the Chancellor. The Unions are suggesting that the government should persuade the British Business Bank to provide more favourable services for small businesses. The formal letter also underlined that the Unions wanted a stronger and balanced economic recovery.

All these suggestions would have certainly been scrutinised, and now the final decisions would have been made. As mentioned earlier, it is expected that the business sector will be allocated a reasonable portion of the budget to promote economic recovery. Many businesses are set to be formed, and we at eformations will be available to help all those who are struggling with any aspect of company formation. If you need any help our experts will be available to guide you through our personalised service. Get in contact with us today on 02082325479.

The Responsibilities of a Company Secretary

12 March 2014

When you create a new limited company, you have the option to appoint a company secretary. Since April 2008, private companies have not been required to have a company secretary, and if you choose to form a company without one their duties simply fall to the directors. However, as many companies do still choose to appoint a company secretary, understanding the responsibilities of the role is vital.

The company secretary is an officer of the company, and therefore shares legal responsibility with the directors with regards to the requirements of the Companies Act. Like the directors, the company secretary can be subject to prosecution if they fail in their duties.

Many of the duties of a company secretary can be delegated to outside experts – accountants, solicitors, chartered secretaries etc. – but the secretary maintains responsibility and has to check and sign the paperwork themselves.

Where a company secretary is appointed, the task of filing paperwork with Companies House is usually their responsibility. This is a vital task, as it includes documents such as the Annual Return and accounts; these are required by law, and the company may be struck off if they are not filed in time.

They are also usually responsible for establishing and maintaining the company’s registered address. This must be a real address, not a mail box; however it does not have to be the location at which you carry out your business. If you choose to use an address service then the company secretary will be responsible for ensuring that their official mail is collected, or that measures are in place to have it forwarded promptly.

Maintenance of the company’s statutory books and records, and the security of the company’s legal documents, also generally falls within the role of the company secretary.

In smaller companies, the company secretary is often responsible for other administrative duties, such as PAYE and payroll, insurance, pensions, and VAT registration; however this will vary from company to company.

As experts on company formation, we offer a range of services to assist your company secretary should you choose to have one; for more information simply call us on 0208 232 5479.

UK Economy Set For a Highly Positive Summer

11 March 2014

The UK economic recovery has been a well-discussed subject over the last few months. This is because it followed a lengthy economic slump, resulting in many companies finding themselves in desperate situations that threatened many businesses’ existence. Many companies were put to the test, and many struggled to resist the financial pressures. However, now that this bleak period is over, companies that overcame this test can enjoy exploiting the highly promising economic conditions.

According to an article by the BBC News, the British Chambers of Commerce (BCC) has predicted that the economy is set for a very positive run over the course of the next few months. The BCC underlined that the ‘size of the overall UK economy will this summer overtake the peak level it was at before the 2008 financial crisis’.

GDP levels have also been forecasted to take a turn for the better in the second quarter of the year. Now, economic growth predictions have been upped from the previous 2.7% increase to a 2.8% forecast for this year only. There is also a 0.1% increase in the forecast for 2015. The authoritative group, BCC, also highlighted that interest rates tend to increase during favourable economic conditions, which has led the group predicting a 0.25% increase in interest rates from the current 0.5% predictions.

Further optimistic predictions are expected when Chancellor George Osborne makes the budget announcement for the next fiscal year on the 19th of March. The economic recovery has led to many industries prospering, opening the opportunity for corporate expansion and lowering the barriers to entry for newly starting businesses. Entrepreneurial-minded individuals have already noticed this trend, and are utilising this situation as a safe entry point through which they could easily establish their business among the other existent forces.

As a company that specialises in providing professional assistance with company formation, we at eformations have already noticed this trend, as numerous business people have approached us to help them with company formation, and we have handled these requests in a professional manner each time. If you are starting up your company, do not hesitate to enquire about our services. We offer an extensive array of services, including limited company registration, to meet your every need.

A Guide to Company Restoration

07 March 2014

While the effects of a company being struck off the Register can be detrimental to the directors of the company, the actual process of Company restoration isn’t as complicated as it sounds. It applies to those companies who had to be dissolved due to either some problems, or who were struck off by the Registrar due to non filing of annual documents. Sometimes business owners choose to strike off their own company because they have no further use for it: if this is the case for your company you have to apply for restoration through a court order. If your business is struck off by the Companies House you can easily apply for administrative restoration. Eformations provide professional advice if you are unsure which restoration process is relevant to your business, and can smoothly restore the business for you.

Why would a company be struck off?
Company directors or shareholders may decide to strike off a company if they have ceased trading or they no longer need for a business. People may voluntarily apply for their company to be struck off if they have stopped trading, they are merging two businesses and therefore closing one, they are retiring and there is no one to take over, or, in sad cases, some business ideas simply don’t work out. Alternatively, under section 1000 of the Companies Act 2006, the Companies House has the right to dissolve your company if they have reasonable belief that it is no longer trading. Common reasons for the Companies House assuming a business no longer exists and striking it off include:

  • Failure to submit an annual return form.
  • If you miss the deadlines for filing accounts.
  • Failure to inform about change of address, as correspondence will be unanswered.
  • Failure to inform of a company name change.


Why restore a company?

If companies are struck off the register involuntarily by the Companies House, then one of the first things company owners normally do is restore the company so they can continue trading. Company restoration isn’t the same as company formation, so you mustn’t try to form another company with the same name when you discover it has been stuck off, as this will result in your business assets still being held by the state. Company restoration is essentially the revival of the existing company; complete with its existing assets.


Other reasons for restoring a business that has been either voluntarily or forcibly struck off include:

  • To wrap up affairs that have been left, in order to properly close it down.
  • To pursue an injury claim sustained whilst the company existed.
  • To pay debts.
  • To release pension funds or other assets that can be divided between shareholders.
  • To complete a property transaction.


Who Can Restore a Company?
2273312A wide range of people may apply for a court order restoration, including directors, members, employees, creditors, Secretary of State, HMRC, managers or trustees of any employee pension scheme. For administration company restoration, only a director of the company can apply.


How do you restore a company?
Administrative restoration is a lot simpler than Court Order restoration: the process was simplified in the Companies Act 2006 to make it easier for companies that were being struck off involuntarily. As most of the companies struck off the Register were in this category it has eased off the burden on the directors of the company as well as the Registrar. To qualify for administrative restoration, you have to have been struck off by one of the following legislations:


  • Sections 1000 or 1001 of the Companies Act 2006
  • Section 652 of the Companies Act 1985


If you qualify for administrative restoration then you have to fill in an application form for administrative restoration, and send this to the Companies House; along with the administrative fee and any outstanding payments and documents. These include annual returns and accounts, late filing fines and a Bona Vacantia Waiver letter in order to release your company assets. If your company restoration application is rejected, you can apply through Court Order.


Eformations are here not only to form new companies, but also to support and guide those companies who have been struck off through restoration. Through careful consultation and preparation, we can guide you through the restoration process using either the administrative or Court Order process, depending on your circumstances. Together, we can have your company back on its feet in a matter of months and with minimum stress. By advising you on the most appropriate route to company restoration we can sometimes save the cost as well.

The Benefits of Setting up as a Limited Company

06 March 2014

Setting up a business as a limited company is very appealing to many business owners, as there are numerous benefits that are presented to the company due to this status. Yes, there might be slightly more paperwork, extra legislations to follow and a small increase in costs compared to existing as a small entity like a sole trader, however the long-term benefits of being a limited company are certainly worth the extra effort.

As an organisation that specialises in limited company formation, we at eformations have in-depth knowledge about what makes a limited company a cut above the rest. Using our experience, we will use this article to discuss some of the many reasons why it is a good idea to set up and exist as a limited entity.

Separate Legal Identity

A limited company is recognised as a separate legal identity to the company directors and shareholders. Therefore, the company owners or shareholders can be changed at any time, as long as the Companies’ House is informed about the alteration. In cases where the business owner dies or becomes unable to take any further part in operations, the changeover process is straightforward.

Limited Liability

Many business people will be aware of the financial security within limited companies. Since the business has its own identity, the business owners are not liable to any debts that the business accrues. For instance, in the case of corporate failure the business owner’s personal assets, such as their residential property or vehicle, are not liable to repossession as a compromise for the arrears.

Funding Credibility

Setting up as a limited company opens up many funding avenues, as investors like banks always associate limited companies with reliability. Companies are perceived as low risk investments since they have high value assets that they can secure the loan against. Furthermore, if the company is a limited organisation, it is possible to create shares and offer them to current shareholders and possible investors to increase funding for the business.

There are currently over 2.7 million limited companies in the UK alone, and an increased number of business people are showing more interest in existing as a limited organisation. At eformations, we have helped many reputable companies achieve limited company status through our professional services over the years. We have fully qualified and highly skilled experts available to offer you guidance every step of the way. If you need more information regarding limited company formation, please do not hesitate to contact us.