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Mistakes to Avoid when Forming a Company Online

Deciding to form a company is an exciting step that can be taken by anyone. Over the years Companies House has made it easier to form a company by moving the process online rather than having to fill out a myriad of forms and send them off via post. But as with anything, without knowing what you're doing or if you become confused, you can often miss out important information or just generally make a mistake.

Choosing the wrong Company Address

Choosing the right address is more important than you think as it is where all official communications will be sent to from HMRC and Companies House. This doesn't have to be the offices you are operating from, you can use your home address. However, the address you choose will be visible to the general public via the Company Register, so make sure the address you choose is one that you are comfortable having in the public eye.

What address could I use instead?

If you don't have another address to use such as an office or workplace address, some companies use their accountants address - but always check before using it. The other alternative is to use a virtual address. There are various providers of these. Company Wizard also offers the use of its London address (this can be selected during the incorporation process).

What's the difference between a Service Address and Registered Address?

It's a good question! We looked at this previously in another blog post

Forming the wrong type of company

As we've previously looked at, there are a few different types of company you can incorporate, and you'll have to decide on which one is right for your business and the set-up you're looking to achieve. You may decide to start out as a sole trader for the early days and become a limited company later in the business' life, which is a common scenario.

But on top of sole traders and limited companies there are many different forms of company you can incorporate so do your research and make sure you're making the right decision.

We've included a few key points on the different types of company you can incorporate, which we recommend taking a look at:

Not registering for Corporation Tax

If you're a sole trader you don't have to worry about Corporation Tax, but if you register to become limited it's a very important part of running the company. When you become incorporated you have a legal duty to become registered for Corporation Tax within 3 months.


If you do not register then, legally, you should not begin trading. Even if you never earn enough money to pay Corporation Tax you still need to be registered and you must still file for it.

Not specifying shareholders

On the face of it you can have as many people working for your company as you would like, but if they own any part of the company, or have any influence over the decisions being made then they have to be mentioned. With private limited companies you put a value on the shares being handed out and they will always be the value you state. However, with a public limited company the shares are traded in an open market, in order for this to happen, the company needs to be able to generate enough revenue.

Anyone who owns shares of your company should be mentioned when you incorporate your company (in the Memorandums of Association), if you forget about this you can add them later, but doing it from the offset can mean there has always been a record of them being there. If you are allotting them shares after you have incorporated, you will have to fill out the form SH01 and you also have to notify HMRC when you fill out your next Confirmation Statement.

Shares also need to be accounted for by the company. Some choose to issue shares pound-for-pound to represent the true investment they are putting into the business. But consider this when you're thinking of the amount of shares to issue.

Not deciding how the company will be run

This doesn't refer to the day-to-day running of the company but instead looks at who will have the majority voting share or who will have the overall responsibility for the running of the company and making sure that all decisions made are legal. This will be set out in the Articles of Association when you register the company. For most companies the Standard Article" will apply, you can change this and write your own if you wish but you will not be able to register online.


Looking through this post you can see that there are a few things you should be considering when you incorporate. Here at The Company Wizard we can help with these things. However, if you've even experienced a mistake with filing we would like to hear about it, share it with others through our Facebook page or twitter feed and let others know the common issues that tripped you up.

Ready to start the process?

If you're ready to go, you can go on ahead and incorporate your business today with Company Wizard. It's quick and easy too.

Start a basic application now

I have more questions!
Contact us by email or phone and we'll try our best to help you. Whether this is during the incorporation process, or before - we're here to help.

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