We’ve formed over 1 million UK limited corporations. With this many corporations under our belt, not only will we know the way to get corporations incorporated, but we also know what gets company formations rejected by Corporations House (the UK’s registrar of corporations). On this post, we’re going to have a look at the highest explanation why recent company applications are rejected, and the way we are able to enable you to avoid this.
The highest explanation why Corporations House rejects applications
Whether corporations are formed through us, competing company formation agents, accountants, or directly with Corporations House – nearly all of corporations arrange within the UK are formed online. The power to include an organization online has eradicated lots of the explanation why an organization application can have been rejected 20 years ago.
For instance, to register a personal company limited by shares (the variety of company we’ll be concentrating on on this post), you would like at the very least one director and one shareholder. Previously, when paper incorporations were predominant, applications would have been knocked-back because basic information was missing – similar to no shareholder was named within the incorporation documents.
Now that the duty of forming an organization will be accomplished online, you just wouldn’t find a way to submit an application if you happen to haven’t named a shareholder.
As you’ll see, most applications are rejected not because the knowledge is missing, but because the knowledge that has been provided is inaccurate.
So, listed here are the highest explanation why company formations are rejected by Corporations House…
1. The corporate name doesn’t include Limited, Ltd, Cyfyngedig or Cyf
The vast majority of private limited corporations need to incorporate the ‘Limited’ suffix, or a version of it (Ltd, Cyfyngedig, or Cyf). The one exception to this is that if an organization is a registered charity or limited by guarantee that meets very specific requirements.
Applications that reach Corporations House without the crucial suffix will probably be declined.
2. The corporate name features a sensitive word or expression but supporting documentation hasn’t been provided
There are specific words and expressions that may’t be utilized in an organization name without supporting documentation, similar to a letter of non-objection, from an authorising body.
For instance, to form an organization with the word ‘Bank’ in it, permission should be granted by the Financial Conduct Authority.
This regulation is in place to be certain that the general public cannot be misled or harmed by an organization.
If an organization name features a sensitive word or expression and the crucial approval hasn’t been included as a part of the appliance, Corporations House will refuse it.
Should you are forming your organization with us, we’ll notify you in case your proposed name includes any sensitive words and expressions and let you know who it’s worthwhile to contact (and what information it’s worthwhile to provide) to get the crucial permission. If granted, you’ll be able to upload proof of this permission as a part of your organization formation.
3. The corporate name is just not unique or is simply too much like one other company
Corporations House doesn’t allow duplicate names on the register. In addition they won’t allow an organization name to be too much like one other name on the register unless the unique company gives their permission (normally this happens if the brand new company is a component of the identical group as the unique company).
Corporations House will reject an application in the event that they consider an organization name to be the ‘Same as’ or ‘Too like’ an organization that’s already on the register. Here’s what these terms mean:
- ‘Same as’: Some words and punctuation don’t differentiate a reputation. For instance, if ‘Your Company Name Ltd’ has already been registered, Corporations House wouldn’t allow ‘‘Your Company Name UK Ltd’.
- ‘Too like’: Likewise, an organization name can’t be broadly too similar. For instance, if ‘Your Company Name Ltd’ has already been registered, Corporations House may not allow ‘‘Ur Co Name Ltd’.
4. The corporate name is offensive
In case your proposed company name features a word or term that may very well be deemed offensive, your formation will probably be refused.
After all, what causes offense differs from individual to individual, so Corporations House should watch out in regard to the names that do get accepted. Listed below are a number of the names that Corporations House have rejected previously for being offensive:
- Constructing That Fought Hitler Limited
- Cambridge Cannabis Club Limited
- Fancy a Bomb Ltd
- Fit as Fork Ltd
- Go Fudge Yaself Ltd
- Just Weed Ltd
- The Great Big Corrupt Company Ltd
5. The registered office is just not based within the UK
The registered office address should be based within the UK. Should you enter a registered office that is predicated anywhere aside from England, Scotland, Northern Ireland, or Wales, the formation will probably be dismissed.
Don’t have access to a UK address to make use of as your registered office address? No problem. Quite a lot of our company formation packages include our Registered Office Service, where you should utilize our address as your registered office. We also offer a dedicated Non-Residents Package for patrons who don’t live within the UK (that features the Registered Office Service).
6. The address doesn’t match the country chosen
When forming an organization, it’s worthwhile to provide quite a lot of addresses:
- The registered office address
- The service address (also often known as a correspondence address) for each director, shareholder, secretary, and person with significant control (PSC)
- The residential address for each director and PSC
If the town entered for any of those addresses doesn’t sync with the country, the appliance is not going to be accepted.
For instance, if Glasgow is entered because the town but England is chosen because the country, Corporations House is not going to form the corporate.
7. The residential address for a director or PSC doesn’t seem like a residential address
Directors and PSCs must provide a residential address when being appointed. This address is just not placed on the general public register (unless the residential can be getting used because the registered office address and/or service address).
This should be the actual location where the person being appointed lives.
If an obviously non-residential address – similar to a business centre address or an address that stretches across multiple numbers – is entered because the residential address, Corporations House will reject the appliance.
8. A PO box address is used because the registered office
The registered office address should be a physical location where official company documents will be delivered. Any formation request that features a PO Box address getting used because the registered office will probably be refused. Each PO Box has a full underlying postal address, and this should be entered as an alternative to be accepted.
9. A proposed director is just not suitable
Not everyone generally is a company director. If any of the below applies to a director you are trying to appoint on the time of your organization’s formation, your application will probably be refused:
10. An initial is getting used in a director, secretary, shareholder, or PSC’s name
You will need to provide the total name to your appointments. Initials aren’t accepted.
If an officer legitimately has just an initial as a part of their name, supporting documentation to prove this must accompany the formation request.
11. Invalid information is entered
In the case of naming and appointing the people in your organization, the corporate formation process includes quite a lot of open fields that will let you type what you would like. These include the next fields:
- Title
- Nationality
- Occupation
Nonetheless, if the knowledge provided inside these is just not considered valid by Corporations House, your application will probably be refused. For instance, if you happen to enter Londoner as your nationality – your application will likely be rejected.
12. The corporate being formed is a shareholder of itself
Corporations can hold shares in other corporations. Nonetheless, they will’t issue shares to themselves.
Subsequently, if you happen to are forming an organization and select so as to add that exact same company as a shareholder (no matter what number of shares you’ve got chosen to allocate), your application will probably be pushed back.
13. Decimal shares have been allocated
When forming your organization, the person shares that you simply give to every shareholder should be whole – they can’t be split into anything less.
This commonly happens when someone wishes to issue a specific variety of shares, similar to 100, to an uneven amount of shareholders, similar to 3.
So on this instance, they attempt to offer 33.33 shares to every shareholder (as a way to have an equal share split).
Any applications that try to do that will probably be rejected.
To make sure an equal share split in the corporate, simply give each shareholder the identical amount of shares.
14. The bespoke articles of association aren’t correct
The articles of association is the document that outlines how the corporate will probably be run. We use a modified version of the model articles of association to form corporations. These suit nearly all of private limited corporations which might be formed within the UK.
Some business owners decide to register using their very own bespoke articles of association. Since it is a fancy document, this often leads to mistakes being made and the formation being declined.
We can assist if you happen to want to register an organization using your personal articles of association. Get in contact with our Company Secretarial Team via cosec@1stformations.co.uk or 020 3984 5387 and we’ll be blissful to assist.
15. The company appointment information is inaccurate
It is feasible to appoint one other company to a task inside the company that’s being formed (if appointing a company entity as a director, you have to have at the very least one actual person within the director role too).
This corporate entity will be based within the UK or overseas.
When the corporate is predicated outside of the UK, you have to provide the ‘Law Governed’ and ‘Legal Form’. These two fields will be problematic, with misinformation often being provided or the knowledge for the fields being omitted entirely. This then leads to the appliance being rejected.
To make clear and provides an idea of what does must be provided, here’s a definition of the 2 terms:
Law Governed: The act that regulates the corporate’s activity. For the UK, that is the ‘Corporations Act 2006’.
Legal Form: The structure of the corporate. For the UK, this may very well be a ‘private company limited by shares’.
So there you’ve got it, the highest explanation why company formations are rejected
In some instances, an application being declined is sweet. If an organization is formed with misinformation, you should have to take steps to repair it post-formation, which is trickier than fixing it before the corporate has been formed.
For instance, if an organization was formed with duplicate directors, you would want to resign one in all them via a letter of resignation, the crucial resolution, and the filing of the TM01: Termination of appointment of director form. This a nuisance, and whilst you’ll be able to remove the erroneous director from the corporate, the undeniable fact that a mistake was made will at all times appear on the general public register.
It’s much better for Corporations House to beat back the appliance, will let you fix the issue, after which resubmit. To substantiate, resubmitting an application comes with no extra cost.
Nonetheless, even higher than that is avoiding mistakes in the primary place.
We are able to get your organization formation accepted the primary time
Should you decide to form your limited company with us, whatever the company formation package that you simply go for, you’ll discover the best possible process.
Through our experience, we all know what areas of the formation could cause confusion. These sections are clearly explained in the simplest terms, with jargon kept to a minimum. At the top of the method, on the ‘Summary’ page, you’ll find a way to review and edit the knowledge that you’ve got provided.
Should you do have any questions on your organization, we provide 24/7 support. Select the technique of contact that suits you (phone, email, or live chat) and get in contact. We’ll then find a way to help you.
For further assurance, reap the benefits of our Pre-Submission Review
When purchasing your organization formation package, you’ll notice a ‘Pre-Submission Review’ product in your basket, priced at £4.99.
By leaving this in, our team of company experts will look over your application intimately, checking for the mistakes we’ve mentioned on this post, in addition to typos that might cause you unnecessary work in the longer term. If we spot something that doesn’t look correct, we’ll be in contact to examine with you after which fix the issue accordingly.
Only after we are satisfied that every thing is correct will we submit your application to Corporations House.
Thanks for reading
So there you’ve got it, 15 explanation why recent company applications are rejected.
Follow our advice (and form your organization with us) and your organization formation will go ahead easily with not a rejection in sight.
We hope you’ve got found this post helpful. Please leave a comment about anything we’ve raised and we’ll be blissful to assist.
