Nine mistakes people make registering a company

The most common formation mistakes are using a home address that then stays on the public record, issuing a single share, choosing the wrong jurisdiction, picking SIC codes carelessly, confusing directors with shareholders, and assuming registration is the same as permission to trade.

Using your home address

It goes on the public register, free to search, and it stays in the filing history after you change it. A service address at formation costs a fraction of what suppressing an address later costs, if it can be done at all.

Issuing one share

Legal, common, and awkward. You cannot give someone 10% without issuing more shares or splitting the one you have. A hundred penny shares costs the same £1.

Choosing the jurisdiction carelessly

It is permanent. A company cannot move between England and Wales, Scotland and Northern Ireland afterwards.

Picking SIC codes in thirty seconds

Banks, insurers and lenders read them years later as a statement of what you actually do. A mismatch between your SIC code and your description is a common reason bank applications stall.

Confusing directors and shareholders

One runs the company, the other owns it. Appointing someone as a director when you meant to give them equity — or the reverse — is the root of a large share of shareholder disputes.

Relying on model articles with two shareholders

Model articles say almost nothing about deadlock, someone leaving, or a founder who stops working in the business.

Assuming registration means permission

A company that needs a licence still needs the licence. Incorporation gives you the vehicle, not the permission.

Forgetting the company is not you

Its money is not your money. Taking it out is a salary, a dividend or a director's loan, and each has different tax and paperwork.

Missing the first confirmation statement

It is due whether or not anything changed, and missing it is the usual first step towards being struck off.

Where to go next

• Name Check
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