Why use a company formation agent to set up a company?

The world of company formation can seem like a daunting place, especially if you’ve never set up a company before. However, the terminology, legal requirements, and registration process are easy to get to grips with if you use a company formation agent.

Before we take a look at the benefits a company formation agent can provide to limited company owners, let’s take a moment to explain just what they do.

What is a company formation agent?

A company formation agent is an independent business that forms companies on behalf of other people. These agents provide easy incorporation services that enable people to set up various types of company structures entirely online. They also offer professional expert advice, assist their clients throughout the company formation process, and provide additional corporate services and ongoing support to company owners.

Legitimate formation agents in the UK are authorised to incorporate (register) companies electronically with Companies House – the official registrar, responsible for approving company incorporations in the UK.

The benefits of using a company formation agent

Using a company formation agent to set up a company in the UK provides a range of benefits when compared to incorporating directly at Companies House. Below, we list the main advantages of forming a company through an agent.

1. Easy company formation   

Company formation agents make the incorporation process easy. They provide a simple, user-friendly online application form that takes about 5 minutes to complete. Some agents, like Quality Company Formations, also offer a service where they will set up a company for you over the telephone.

All of the company formation terminology and legal requirements are clearly explained, helping you to understand the information you need to supply to form a company and why you’re being asked to provide it. 

Our Fully Inclusive Package - the perfect way to set up a company

Most agents will offer a range of company formation packages to suit the needs of every client. Whether you simply want to protect a company name, form a limited by shares company, set up a company as a non-UK resident, register a non-profit limited by guarantee company, or form a limited liability partnership (LLP) – agents will most probably have a company formation package that is right for you.

Once your application form is complete, it will be reviewed by a team of experts, then electronically submitted to Companies House and approved within 24 hours. This means that you can set up a limited company and start trading on the very same day.

2. Expert help and advice

You will benefit from free expert help and advice from a team of company formation specialists. This includes:

• Guidance on the best company structure for your business or organisation
• Advice on which company formation package is most suitable for your needs
• Information on choosing a company name
• Assistance with completing the application form
• Advice on choosing a share structure for your limited by shares company
• Answers to any queries you may have about setting up and running a limited company
• Help and advice throughout the life of your business 
• Online resources explaining everything you need to know about limited companies

3. Free Pre-Submission Review

Some agents, such as Quality Company Formations, will include a Free Pre-Submission Review in their packages. This means that an experienced company formation specialist will conduct a thorough review of your application form to ensure that all information is presented properly and accurately.

As a result of this measure, far fewer applications are rejected due to minor, avoidable issues like spelling mistakes, grammatical errors, incorrect capitalisation or inconsistent letter cases, and missing key information. In fact, your application is 10 times less likely to be rejected at Companies House. 

If your company formation is rejected, your agent will provide assistance by rectifying the issue(s) and resubmitting the application on your behalf, for no additional charge.

4. More company structure options 

A good company formation agent will provide online incorporation services for many more company structures than Companies House offer. For example:

• Companies with multiple share classes and/or with bespoke articles of association
• Right to manage (RTM) companies
• Property management companies
• Specialist limited by guarantee companies, e.g. ‘limited’ name exemption, charity and bespoke

5. Full set of incorporation documents and company registers

A company formation agent will normally provide a full set of company documents including minutes of the first board meeting and company registers, which represents a significant advantage over incorporating directly with  Companies House which only provides the certificate of incorporation.

Company documents you can expect to find from an agent:

• Certificate of incorporation
• Memorandum and articles of association
• Share certificate(s) for each shareholder
• Minutes of the first board meeting
• Company registers

6. Company address services

One of the requirements of setting up a limited company is to provide and maintain a registered office address in the country of incorporation. Additionally, every company officer, member, and person with significant control (PSC) must provide a service address, also known as a correspondence address.

You may be tempted to use your home address, but be aware that it will appear on the public record. If you would rather protect your privacy, which we strongly advise, you should use a commercial (non-residential) address instead.

Most company formation agents will help their clients to protect their privacy and enhance their corporate image, with professional company address services, such as the following which are offered by Quality Company Formations:

• Registered Office Address Service
• Director’s Service Address
• Business Address Service

7. Additional business services

As well as a wide range of company formation packages and company addresses, agents normally provide a number of additional business services, including: 

• Partner offers, such as business banking, accounting software, and domain names
• Drafting of bespoke articles of association and shareholders’ agreements
• Business telephone services
• Company secretary services
• VAT and PAYE registration
• Apostilled documents and certificates

8. Online Company Manager

Finally, a good company formation agent will provide a free Online Client Portal also known as an Online Company Manager, where their customers can manage and oversee their company details and filings.

As soon as a company is incorporated, all company details will be automatically loaded onto this system, so company owners will be able to access their incorporation documents, company authentication code, official government mail, and filing deadlines all in one place. They can also use this portal to update their company details at Companies House. 

In conclusion 

We hope that this post has shed some light on what a company formation agent does – and the many benefits you can enjoy when using an agent to set up a company in the UK.

If you have any questions about the company formation process or limited companies in general, please contact our expert team on 020 3908 0044 or leave a comment below.