Blog - forming a limited company

The First Year In Business: How Successful Startups Made It Through

07 October 2016

Starting a business is a big risk, but often one that is worth taking. A lot of the time, start-up owners are on the line financially and sometimes even mentally during their first year of business. That first year is critical in deciding whether your business will be a success or a failure. While no one possesses a magic formula that can tell you for sure if your business will be a hit or a miss, these tips will help you to make that first year as good as it can be and line your business up for its best chance at success!

Keep on trying

When you read about businesses succeeding or failing, you’d be forgiven for thinking that there are only two options – magical unicorn businesses that are instant runaway successes and disastrous failures – businesses that have always lacked potential and are doomed from the start. The truth is that most startup businesses usually fall somewhere in-between these two extremes.

In order to influence your business in the right direction, perspiration and perseverance is required in order to make your inspiration pay off. It’s also important to try and maintain a positive outlook despite the challenges that your business will inevitably face. If you can see past these challenges to the future of your business, then you’re well on your way to succeeding.

Work together

Time is a commodity during the first year of a start-up and business owners are often immersed in the business, but it can be good to take some time to talk to colleagues, friends and other advisors. Collaborating with these people is a great way to gain feedback, insight and even new ideas that could help your business.

Not every conversation will be of value to your business, but in general most will be positive and you’ll also be building yourself a support network that will be useful in years to come.

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Enjoy the journey

This is an important one! There are a lot of risks involved with starting a business and some challenges can seem insurmountable and create a lot of stress. However, the opportunity to pursue something you truly believe in, to see it grow and to be your own boss is considered by most to be excellent compensation for the initial tough times after forming your company.

Plan for the future!

Planning for year two is something that is important to do. Setting long term goals, such as having five year plans, is also recommended by many leading entrepreneurs. This will also help you to see past any challenges that appear during year one and aid you in finding a way through to business success. It’s also great to set goals so that you know exactly what each task you do is contributing to!

Are you ready to begin your business journey to success?

From forming your company with our online company formation service, to business accounting and much more, we’re here to help your business on its journey to success. Find out more about the services we offer on our website: blog.eformations.co.uk Or alternatively, give us a call for a friendly chat on: 0208 232 5479.

What is Companies House?

10 September 2014

If you’re considering or are in the process of setting up your own business, you’ll probably have heard of Companies House. However, their exact function might still be a bit of a mystery. We’re here to fill you in on all you need to know about Companies House and how it affects your business.

The history of Companies House

In 1844, The Joint Stock Companies Act meant that companies could form more easily than previously when the incorporation of joint stock companies was only possible by private act or royal charter. This act meant that all companies that formed under it were added to a public register. The office of Registrar of Joint Stock Companies was then created to be responsible for maintaining this register.

Currently, company registration is dealt with under the Companies Act 2006.

Today, all limited companies in the United Kingdom are registered with Companies House. There are over three million limited companies currently registered in the UK and every year over 400,000 new companies are incorporated.

What Companies House does

Companies House has a number of functions. The main functions are:

  • Incorporating and dissolving limited companies.
  • Storing and examining company information which has been delivered under the Companies Act.
  • Making this information available to the public.

Where is Companies House located?

Companies House has 3 offices, in Cardiff, Edinburgh and Belfast.

The Cardiff office deals with companies incorporated in England and Wales, and with companies incorporated in Wales. Wherever the registered office of the company will be situated, in England or Wales, the company must be registered in Cardiff. England and Wales are a separate entity from Scotland.

When the registered office of the company is to be situated in Scotland, the company must be registered in Edinburgh.

When the registered office of the company will be based in Northern Ireland, the company must be registered in Belfast.

Upon incorporation of a company the certificate of incorporation produced by Companies House will clearly state where the company is incorporated.

Storage of Information

An important task of Companies House is to store data and provide that data to the public. The statistics of the companies registered at Companies House are published in the annual report.

Can I obtain data from Companies House?

Companies House have a website www.companieshouse.gov.uk where you can obtain information about all companies incorporated under the Companies Act. Most of the information is available digitally at a small charge.

Companies House also provide a wealth of resources and guidance booklets on numerous aspects of incorporating and running a limited company.  This information is available free of charge on their website.

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How can we help? 

While a lot of free information is available from Companies House, it is still a daunting task for a new entrepreneur to work through the jungle of technical information to set up a limited company and run it properly. Give us a call on 020 8232 5479 and don’t forget to visit blog.eformations.co.uk

Responsibilities of Directors of a Limited Company

19 August 2014

You have probably already carried out research on setting up a limited company and have learnt that it takes only one person to set up a limited company. Such a company is called a sole director company. On blog.eformations.co.uk you can appoint yourself as a director and a shareholder and off you go – your company is incorporated.  But, have you wondered what responsibilities are attached with this prestigious title?

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First of all, what are directors?

Directors are essentially people responsible for running the company. They are employees of the company. They work for the benefit of shareholders (members). A director’s prime duty, which he holds together with his fellow directors is to promote the success of the company for the benefit of its members.

The Companies Act 2006 introduced four duties of directors on 1 October 2007 and a further three came into effect on 1 October 2008.These seven duties are:-

  1. To act within the powers (CA2006 s.171) conferred upon them by company law and the company’s Articles of Association.
  1. To promote the success of the company (CA2006 s.172) and in doing so have regard to some matters, for example:

– The likely consequences of any decision in the long term.

– The interests of the company’s employees.

– The need to act fairly between members of the company.

Hence, they must ensure that the company is able to pay its debts and may be held personally liable if it is unable to do so.

  1. To exercise independent judgment (CA2006 s.173).
  1. To exercise reasonable care, skill and diligence (CA2006 s.174).
  1. To avoid conflicts of interest (CA2006 s.175). Directors must avoid situations in which they have or might have a direct or indirect interest that might conflict with the interest of the company.
  1. Not to accept benefits from third parties (CA2006 s.176). They must not use their position to further their own interest.
  1. To declare interests in any proposed transaction or arrangement (CA2006 s.177). 

Directors’ Responsibilities to Companies House

In carrying out their day to day duties directors have responsibilities towards Companies House. They have to prepare and deliver documents, on behalf of the company, to Companies House as and when required by the Companies Act.

  • The annual return.
  • The annual accounts.
  • Notification of any change in the company’s officers or in their personal details.
  • Notification of a change to the company’s registered office.
  • Allotment of shares.
  • Registration of any charges.

The chores of the directors seem onerous but can be considerably lightened by using our service. Call us now on 020 82325479.

How to Choose a Company Name

06 August 2014

Choosing a company name is the first thing you have to think about when forming a limited company. However, it’s often a challenge to come up with a name for your company and there are some pitfalls you’ll want to avoid. That’s why we’ve put together this quick and easy guide on how to choose a company name.

What’s in a name?

There are a couple of pathways to business name creation. If you’re right at the start of coming up with a name for your company, these are the two options you need to consider and choose between in order to come up with a great name.awesome

Option one: Your company name reflects your brand. An example of a company like this is Nike. Perhaps you have a product which has a unique name or you want to incorporate a person’s name – this is a brand business name. It doesn’t tell anyone what your business does (at least until your brand really takes off!) but it’s memorable and reflects the way you want your business to be seen.

Option two: Your company name implies what it is your company does. An example of this is the London Tea Company. A name similar to this has the benefit of instant customer comprehension. You know from the name of the example company that they probably make tea. This company has also added their location which can be a further benefit if you’d like your business to have more appeal to locals. Adding a place name can be a great way to make your business name unique.

Is your name already taken?

Now you’ve come up with a possible company name, it’s time to check its availability. You can do that on our website by clicking here: https://blog.eformations.co.uk/

If your name is available, then congratulations!

Common problems:

My company name is too similar to another registered company name

An example of a company name being too similar could be if you were trying to name your company ‘Just Gift Limited’ and there was another company with the registered name of ‘Just Gifts’, Just Gift UK, Just Gift Holdings, or Just Gift International Limited. There are many other examples of similar names. While 3 years ago the Registrar of companies was allowing the registration of similar names that is no longer the case. Sometimes when people do their own company name availability searches they forget to check for other similar names. They get a surprise when their application gets rejected. The solution to this problem is to try and further differentiate your name or perhaps think of a different name.

My company name has sensitive words

You make an application to register a company name but the application gets rejected because the name has a ‘sensitive word’ in it. Sensitive words are those that require permission from the relevant government body before the Registrar of companies will allow their use. Some examples are, ‘British’, ‘English’, ‘International’, ‘Holdings’, ‘Dentistry’, ‘European’…..and many more.

blog.eformations.co.uk  has a name check service which checks for exact matches, similar names and any other names which are likely to get rejected by the Registrar. A simple phone call to the eformations team can solve your problem.

My name is already registered but I really want to use it

If you’ve found a name that is absolutely perfect but has already been registered, there could be a way around it. People sometimes register any company name, say,  ‘ABC Limited’ and have their chosen name as the ‘trading name’ or sometimes called the ‘business name’. This option can sometimes work, but you have to remember that although business names don’t come under the Companies Act, some of the rules used in the legislation still apply. If the business name is close to a limited company name, the limited company will always win the legal battle.

Our advice

It is best to protect the name of your choice by incorporating it into a limited company and choose a name that best reflects your service or products without infringing on the rights of another name.

blog.eformations.co.uk  has a name check service that checks for exact matches, similar names and any other names which are likely to get rejected by the Registrar.

Have you come across a problem when deciding upon a company name? Share it with us.