1. Choosing a Problematic Company Name
Your company name needs to be both legal and practical. Common naming mistakes include:
- Using a name that’s already registered (or too similar to an existing one)
- Including restricted words without approval (e.g., “Group”, “Trust”, “Bank”)
- Failing to check for trademarks or domain name availability
Fixing this after incorporation can be expensive and disruptive. Dragonfly Associates helps clients verify name availability and suitability as part of our formation services.
2. Using a Home Address for the Registered Office
While it’s legal to use your home address as your registered office, it’s not advisable. Doing so means:
- Your address is published publicly on the Companies House register
- You may receive unsolicited mail
- You reduce your privacy and professionalism
We recommend using a professional registered office address. Dragonfly Associates provides this as part of selected formation and compliance packages.
3. Appointing Ineligible or Inactive Directors
Every UK company must have at least one director. Common errors include:
- Appointing someone under age 16
- Choosing someone who is disqualified or bankrupt
- Appointing a director who isn’t aware of their responsibilities
Directors are legally responsible for the company’s compliance and financial reporting. Dragonfly Associates can help brief new directors on their obligations and ensure appointments are legally sound, where requested.
4. Not Clearly Defining the Share Structure
Many new business owners overlook the importance of properly allocating shares. Mistakes here can lead to:
- Ownership disputes
- Tax inefficiencies
- Inability to attract future investors
It’s crucial to define who owns what, how many shares exist, and whether different share classes are needed. We support clients with standard share structures during formation and can advise on more complex scenarios under agreement.
5. Using the Wrong SIC Code
Your SIC (Standard Industrial Classification) code tells Companies House and HMRC what your company does. Choosing the wrong one can affect:
- Tax registration
- Industry classification
- Eligibility for grants or reliefs
Dragonfly Associates assists with SIC code selection as part of company formation services, ensuring your activity is correctly recorded.
6. Delaying Corporation Tax Registration
Forming the company isn’t the end. You must register for Corporation Tax with HMRC within three months of starting to trade. Delays here may result in:
- Missed deadlines
- Penalties or fines
- Complications in filing your first return
We help clients register with HMRC during or immediately after formation, depending on their service package.
7. Forgetting to Maintain Statutory Records
After formation, every company must maintain:
- A register of directors and shareholders
- A PSC (Person with Significant Control) register
- Share certificate records
- Annual filings (Confirmation Statement, Accounts)
Missing these obligations can lead to strike-off warnings or fines. Dragonfly Associates offers company secretarial services to manage this for you, subject to agreement.
8. Assuming Everything Is Done Automatically
One of the most common misconceptions is that registering a company means you’re automatically ready to trade. In reality, additional steps may be needed:
- Registering for VAT or PAYE
- Opening a business bank account
- Preparing financial systems for compliance
We help guide clients through all post-formation actions, either directly or through guided documentation, depending on the plan selected.
Why These Mistakes Matter
While none of these errors are irreversible, they can delay your operations, damage your reputation, or create legal risk. By planning carefully and seeking the right advice early on, you save time and avoid unnecessary costs.
Dragonfly Associates offers formation and compliance services designed to help you avoid these common errors. All services are subject to clearly defined terms and availability within your selected package.
Frequently Asked Questions
Can I correct mistakes after incorporation?
Yes, but some changes (like company name or share structure) may involve fees and paperwork. It’s always better to start off right.
Are your services suitable for first-time business owners?
Yes. We specialise in working with startups and small businesses, providing clear guidance tailored to your level of experience.
Do you offer ongoing compliance support?
We do. Depending on the plan you choose, Dragonfly Associates can manage filings, address updates, shareholder records, and more.
Form Your Company With Confidence
Starting a company is more than filling out a form—it’s about making strategic choices that position your business for success.
With Dragonfly Associates, you get the tools, support, and clarity to form your company the right way—backed by professionals who understand what matters.
Contact us today to discuss your company formation and avoid the common pitfalls that trip up new businesses.
Leave a Reply