If you want to start a company in the UK, Companies House is an essential organisation to work with.
Without it, you cannot start a limited business. You can go self-employed and act as a sole trader without Companies House, but when you decide you want to build a brand and a company, you’ll need to get Companies House involved, which is why it’s so important.
In the UK, the total register size of Companies House at the end of March 2020 was 4,350,913 companies — a 3.5% increase compared to the end of March 2019. However, Companies House does not accept all applications to form companies.
There can be a range of reasons why an application will be rejected and delay the formation of your company. You can avoid each of these.
Why Your Application Might Be Rejected By Companies House
Several checks will occur after you submit your company to Companies House that could lead to its rejection.
Companies House often rejects or delays an application for the smallest oversight or error. However, the application form’s built-in checks mean the chances of making a mistake are greatly reduced.
Normally a company registration is rejected or delayed for the following reasons:
- The proposed company name is already taken, or it is too similar to an existing name on the register.
- The proposed company name could be considered offensive or inappropriate.
- The initials of the individuals on the application are provided rather than the full names.
- Missing information.
- Registering an office located in another country or simply not providing the details of the registered office.
- Incorrect spelling of the nationality of an individual.
- Confusing an individual’s nationality with their ethnicity.
- Incorrect articles of association or memorandum.
- Appointing an underage director.
- Having a director who has filed for bankruptcy.
- Having a sole director who is also a corporate body.
- Placing a disqualified director in charge
- The share structure is not correct.
- Supplying an incorrect date of birth and/or residential address, causing the electronic anti-money laundering (AML) to fail.
5 Ways to Avoid Getting Rejected by Companies House
- Check Your Company Name
The name of the company must not be offensive or too similar to an existing company.
You can look up your desired company name and check its availability using Mint Formations’ online facility. Search the desired company name and the advanced name-checker will inform you if it is available or if you will need to change your selection.
You must ask permission from the relevant regulatory body or Secretary of State if you would like to register a name with any sensitive phrases or words in it.
Although some non-profit organisations are exempt, all company names should have “Limited” or “Ltd” at the end of their name and all LLP names should end with “Limited Liability Partnership” or “LLP”.
- Provide a Correct Registered Office Address
The registered office address for a UK company should be in the UK. The use of your home or business address, account’s address or any physical address is permitted.
You must register your company in the country where it is located. Once your company is registered in a country, you won’t be able to change the registered address to another country.
- Check Your Eligibility for the 243 Exemption
The 243 exemption restricts disclosure of the director’s personal information, protecting the director and the people they live with, depending on the nature of their business. According to GOV.UK, the following people are eligible to apply:
- An individual director, LLP member or person with significant control (PSC) — even if not yet appointed.
- The company or LLP on behalf of its directors, LLP members and PSCs — including those not yet appointed.
- Subscribers to a memorandum — if the company or LLP is not yet incorporated.
The S243 box can be found under the director’s section and should not be ticked unless you fit the criteria for eligibility.
- Declare All Persons of Significant Control (PSC)
The information provided regarding PSC powers is where a lot of mistakes occur. It is important to remember that a PSC is a shareholder with more than 25% shares. PSC powers must also be declared to the shareholders. Anyone who does not complete the PSC information and fails to declare a shareholder owning more than 25% of the company is in breach of the company.
As well as failure to disclose a shareholder as a PSC, the following are also common mistakes:
- Failure to reveal a main shareholder’s spouse as a PSC. This mistake can have serious financial consequences.
- Failure to reveal any voting rights — not only shareholding
- Failure to reveal if a PSC can appoint or dispose of the majority of directors.
If any doubts surround PSC powers, an experienced accountant should be consulted. Mint Formations offers clients advice on legal registration and PSC issues.
- Use a Company Formation Agency
The process of incorporating a Limited Liability Partnership (LLP) or limited company is straightforward. Simply submit your filing fee and application form and wait for approval.
The best way to submit your application is by using the online services of a Companies House-authorised company formation agency, like Mint Formations. We help you to avoid the disappointment of rejection and ensure a successful company registration.
Our company formation experts will provide a free pre-submission review with all packages. Checking applications for errors dramatically reduces the average rejection rate of new company applications in the UK. What’s more, if your company is rejected, Mint Formations will fix the problem and re-submit the application on your behalf.
Register Your Company Online Today
You can set up a limited company online at Mint Formations, choosing from a range of company formation packages from as little as £11.99.
All of our packages include an optional business bank account, a set of formation documents — including share certificates delivered by email — a pre-submission review, a free .co.uk or .com domain name for a year and Companies House’s £10.00 filing fee.
Register your company with us today and reduce the risk of having your application rejected by Companies House. Choose from our range of company formation packages from as little as £11.99.
