Common Mistakes to Avoid When Registering a New Company in the UK

Starting your own business is one of the most exciting adventures you can embark on. However, the process of registering a company in the UK can feel a little daunting, especially if you’re new to it. Don’t worry, though—that’s where we come in! Today, we’re sharing the most common mistakes entrepreneurs make when registering a new company and more importantly, how you can avoid them.

Let’s dive in!

1. Choosing the Wrong Company Structure

One of the first (and most important) decisions you’ll make is choosing the right business structure. The most common options in the UK are:

• Sole Trader: Ideal for small, simple businesses, but doesn’t offer limited liability.
• Limited Company (Ltd): Provides limited liability and credibility, but comes with more admin.
• Partnerships: A shared ownership structure that works well for two or more people.

Mistake: Picking a structure without understanding the pros and cons.

How to Avoid It: Take the time to evaluate your business goals, liability concerns, and tax implications. If you’re unsure, seek advice from a professional.

2. Picking a Name That’s Already Taken

You’ve brainstormed the perfect name for your company, and you’re ready to register it—but wait! If your chosen name is already taken, you’ll face delays or even rejection from Companies House.

Mistake: Not checking the availability of your business name.

How to Avoid It: Use our online Company Name Check tool before registering. Make sure your name is unique and complies with their guidelines (e.g. no offensive terms or confusing similarities to existing names).

3. Forgetting to Register for the Right Taxes

Once your company is set up, you’ll need to register for taxes. This includes Corporation Tax, and in some cases, VAT or PAYE if you plan to employ staff.

Mistake: Overlooking your tax registration obligations.

How to Avoid It: Register for Corporation Tax with HMRC within three months of starting business activities. If your turnover exceeds £90,000 per year, you’ll also need to register for VAT.

4. Not Having a Registered Office Address

Every UK company must have a registered office address, which will be listed publicly on the Companies House website. This is where official correspondence will be sent.

Mistake: Using an address you don’t have permission to use (like a rented property without landlord approval).

How to Avoid It: Use your home address if you’re comfortable with it being public or opt for a virtual office service for privacy and professionalism.

5. Misunderstanding Director Responsibilities

When you become a director of a company, you take on legal responsibilities. These include ensuring your company meets its filing obligations, keeping accurate financial records and acting in the company’s best interests.

Mistake: Thinking “director” is just a fancy title with no strings attached.

How to Avoid It: Familiarise yourself with your legal duties as a company director. HMRC and Companies House provide detailed guidance.

6. Skipping the Articles of Association

The Articles of Association are the rules that govern how your company is run. Companies House provides a standard version, but it might not be suitable for your specific needs.

Mistake: Using generic articles without tailoring them to your business.

How to Avoid It: Review the default Articles of Association carefully. If necessary, customise them with the help of a legal professional.

7. Failing to Open a Business Bank Account

It’s tempting to use your personal bank account to get started, but this can create a mess when it comes to managing finances and filing taxes.

Mistake: Mixing personal and business finances.

How to Avoid It: Open a dedicated business bank account as soon as your company is registered. It’s a simple step that will save you headaches later on.

8. Missing Filing Deadlines

Every UK company is required to file annual accounts and a confirmation statement with Companies House. Missing these deadlines can lead to fines and even the dissolution of your company.

Mistake: Forgetting about your annual filings.

How to Avoid It: Set up reminders or use a company formation agent (like us!) to manage your filings and keep you on track.

9. Overlooking Business Insurance

While not all businesses are legally required to have insurance, certain types—like employers’ liability insurance—are mandatory if you have staff. Others, like public liability insurance, are simply smart investments.

Mistake: Thinking “insurance is for later.”

How to Avoid It: Assess your business risks early on and get the appropriate insurance coverage to protect yourself and your company.

10. Going It Alone

Registering a company might seem straightforward, but the process is full of details that can trip you up. Mistakes can be costly, both in terms of time and money.

Mistake: Thinking you don’t need help.

How to Avoid It: Partner with a trusted company formation agent (that’s us!) who can guide you through every step of the process.

Set Yourself Up for Success

Starting a business is a big step, but avoiding these common mistakes can make the process a whole lot smoother. Whether you’re a first-time entrepreneur or a seasoned business owner, taking the time to get it right from the start will pay off in the long run.

If you’re ready to take the plunge, we’re here to help! At The Company Warehouse, we’ve helped thousands of entrepreneurs register their businesses quickly and hassle-free. Let us handle the details so you can focus on building your dream.

Get in touch today and let’s make your business official!

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This article has been contributed by www.thecompanywarehouse.co.uk and www.linkedin.com/in/company-formation-agent, experts dedicated to helping UK entrepreneurs navigate the journey of starting their own businesses.