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Forming a Company - Is It Easy or Difficult?


Why is that some people who have no prior experience in forming a company can do so without any problems whatsoever, whilst those experienced in both the ways of computing and business flounder.

How hard or how easy a person is able to register a company might depend on many factors and the essence of achieving a successful and problem free incorporation is to get as many of these elements in your favour as possible.

This will almost certainly increase the chances of coming away with a newly formed company with all the details being correct and complete.

Some of the factors which might make the difference between success and failure are as follows:

Read the Instructions

Most systems built for the purpose of forming a company are designed to assist the visitor through the process of name selection, package choice and the appointment of the various company officers and other statutory matters.

Many of the difficulties which people experience during one or more of the above company formation stages could have been avoided had they read and understood the guidance and instructions contained on the page.

A common example of this is where a proposed director’s address is given as a business location and not as their usual residential property. Another is when the company being set-up is put forward as one of the directors of itself, which is not legal.

Unusual Requirements

Companies wishing to use reserved words, issuing millions of shares or equities of different classes on incorporation sometimes cause issues because they often require intervention before they formed.

Taking note of the read the instructions section above can often provide sufficient navigation through the tasks which must be completed in order to achieve the desired result.

What will happen in the majority of situations is that the company will take a little longer than usual to be registered, which in itself is not a problem unless time is a particularly pressing factor.

Computer Savvy

In order to form a company electronically a reasonable level of computer literacy is required. It is probably not a good idea for a person’s first journey in the world of computing be one which involves registering a company.

Having said that, a high level of expertise is certainly not required and in any case a calm, deliberate and sensible approach will always trump the overconfident “specialist”.

Knowing What a Company is

Another common issue faced during the company registration process is the sudden realisation that the person is in fact registering a limited entity.

There are numerous people who believe that a sole trade or a partnership is subject to the same or similar registration requirements which exist for UK limited companies.

It is usually at the stage of receiving an online message stating that the application can not be submitted to Companies House because a shareholder has not been stipulated that it enlightens the person as to what they are actually doing.

See the articles on registering a sole trader.

Other Factors

Other factors certainly exist which can determine whether a particular occasion of forming a company is easy, difficult or somewhere in between. There are unforeseen events such as technical failure, spelling errors and registration mistakes which might affect a particular application.

By considering and adopting some or all the elements above the chances of wholesale success might increase substantially. Good Luck.

See our guides on How to Form a Company which can be downloaded or viewed online.

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