Why Was My Incorporation Rejected By Companies House?
Many of the incorporation applications are rejected by Companies House every day. A lot of these are due to simple mistakes that are made which could have been easily avoided. This post will go through some of these problem areas in the hopes that you can avoid making these errors in your application.
Errors with company names
There are rules and regulations set out in legislation that must be followed in regards to company names. If you fail to follow these rules will mean that your application is rejected, some of the more common pitfalls are:
Including sensitive or offensive words
Within Companies House, there is a list of sensitive words or expressions that will require approval from the Secretary of State before they can be used in a company or business name. It is designed this way so that business names do not harm or mislead the public by:
- Suggesting a particular status or function e.g. “Institute” or “Tribunal”
- Implying a connection with the UK government, or local public authority
- Including a word that represents a regulated activity
- Including a word that suggests criminal activity
If you wish to use a sensitive word in your company name, you must provide information to support the proposed name, such as a letter or email of non-objection from a specified body, along with the registration. If you are registering using a sensitive word and your application has been rejected by Companies House it could be because:
- There was a failure to supply a letter of non-objection or supporting evidence
- The sensitive word has been concealed within another word e.g. Kingsbury and supporting evidence has not been provided with the application
- The letter of non-objection for the use of the sensitive word is not accurate, for example, it may be for a different name, or from the wrong government department
- The company’s articles of association have not been changed to reflect the sensitive name requirements
- A word used in the name is offensive or pimples a criminal connection
The word “Limited”
Almost all private limited companies are required to add “Limited” or “Ltd” (or “Cyfyngedig” and “Cyf” for Welsh companies) at the end of their name. An exemption can be claimed from this rule if the company is a registered charity or has been limited by guarantee.
“Same as” and “too like” names
If the name you are trying to register is the same as one belonging to an existing company on the register, your application will be automatically rejected.
Even if the name is slightly different, it may still be rejected because it is “too similar” to the other company name. Certain words such as “the” or “UK” are considered invisible for the purposes of similarity. So, for example, “Blue Hedgehog UK Ltd”, is considered to be the same as “The Blue Hedgehog Ltd”.
If the existing company with the similar name provides a letter confirming that it has no objection to you registering the name, then you can be provided with an exemption from this rule.
Only characters specified in Schedule 1 of The Company, Limited Liability Partnership and Business (Names and Trading Disclosures) Regulations 2015 can be used in the company name. This excludes a number of symbols, for example, emojis.
Company officer’s details
When filling out the details for the company officers, there are a few places you could go wrong.
Initials instead of full names
When filling out the application form, the full names (including middle names) should be used in the application. If initials or abbreviated names are used, this could lead to the application being rejected.
If a commercial address is used as the company director’s home address, the application will be rejected. The officer’s residential address must be used.
The residential address must also match the country of residence for the officer.
Section 243 exemption
If the director does not want to disclose their residential address to Companies House they can apply for an exemption. However, when applying for the Section 243 exemption, it is vital that the director supplies supporting evidence with the incorporation application, otherwise it will be rejected.
Directors must be at least 16 years old.
All companies need to have at least one natural (human) director as opposed to only having corporate directors (e.g. another company). If details are not supplied for any natural directors on the application, it will be rejected.
A company limited by shares must issue at least one share. If you do not do this, your application will be rejected.
All shares issued upon incorporation must be whole shares, they cannot be split into percentages between more than one person. For example, if the company has 4 shareholders, at least one share needs to be issued per shareholder.
The details of your registered office need to be accurate, otherwise, the application will be rejected. Common errors include:
- The registered office is in a different jurisdiction from the incorporation (for example, the company is registered in England and Wales, but the registered office address is located in Scotland)
- Providing a registered office address that is situated outside the UK
- Not completing the town/city field, or entering the country in the town field
Disparity between Prescribed Particulars and Articles of Association
Prescribed Particulars are the rights attached to each class of share. These details are required as part of the Statement of Capital, which must be included in the application process. The Prescribed Particulars are set out as:
- Particulars of any voting rights attached to the shares, including rights that arise only in certain circumstances;
- Particulars of any rights attached to the shares, as respects dividends;
- Particulars of any rights attached to the shares, as respects capital; and
- Whether the shares are to be redeemed or are liable to be redeemed
These Prescribed Particulars must match the details provided must match the company’s articles of association, otherwise, the application will be rejected.
Companies House will also reject Statements of Capital if full information is not provided, or if reference is made to another document, for example:
- “Please see the articles of association for the rights”
- “Rights are set out in the articles”
- “Share rights are the same as those already in issue”
- “Not applicable”
- “Pari passu”
Additional causes for rejection
Other mistakes often include:
- Missing fields, such as parts of the application form being left blank
- Missing Persons with Significant Control (PSCs)
- Repeat appointments, this is where someone appoints themselves to the same role twice on the application form.
As you can see, there are a number of reasons that the application can be rejected by Companies House. However, you can avoid this happening as long as you make sure all information provided is accurate and correct and that there are no problems with the company name you are trying to register.
- 30 Jul 2021 - My Company Has a CCJ Made Against It - What Should I Do?
- 22 Jul 2021 - What Do I Need To Keep In Mind When Upscaling My Business?
- 16 Jul 2021 - Company Wizard Help
- 09 Jul 2021 - Does My Company Have a TIN Number?
- 30 Jun 2021 - An Introduction to Corporation Tax