7 October, 2019
Before you buy a virtual office, you probably want to form a limited company. Forming a limited company is surprisingly inexpensive and easy to do. But your company formation fee can vary depending on what route you go down. There are a number of different ways you can form your business, so which one is right for you? Here we look at the four main options you can choose for getting your limited company up and running, and the cost of each.
The most direct way of incorporating is with Companies House. While many believe that this is the cheapest method as it cuts out the middleman, applying by post can actually cost you more. However, there is now an easy web service on the Gov.uk portal that is a fraction of the price.
The three available options via Companies House:
Online service - £12
Using the web service is perhaps the easiest route for most business owners. As long as you have your passport number, national insurance number and some personal information, you could be setup within 24 hours. You will need to know your town of birth, your mother’s maiden name and your father’s first name to proceed, so make sure you have these.
This is the cheapest way of applying direct with Companies House, and payments are easy too via credit card, debit card or PayPal.
Paper application - £40
If you decide to submit a paper application, the total fee will be much higher. This is due to the time it takes for manual processing, and can take from 8-10 days in total. Some business owners prefer paper applications, especially if they are not familiar with digital documents or forms. If you need to seek advice or get help from a business mentor with your application, paper may be preferred as you can easily sit down together and review the documents. However, this is a costly and time-consuming method, and hand-written forms can leave room for errors during processing.
Same day paper service - £100
For start-ups looking to launch without delay, there’s also a same day service for paper applications available through Companies House.
Another way of registering your business is through a formation agent. While going direct seems like the most straightforward way, doing it through an agent could actually be easier. This is because they can guide you through the steps and provide advice, and they can even offer additional services that may be of help to you.
Company formations done direct with Companies House is a ‘no frills’ process, so you’ll get exactly what’s on the tin - a limited company. But new business owners may also need things like address protection, bookkeeping, banking or payroll software.
With a service like Crunch that uses GoLimited as the agent, you can get your company formation fee for as little as £10! This is cheaper than doing it direct, and you’ll also have access to other services, such as accounting or small business insurance.
Some people may feel more comfortable leaving this process with their accountant. If you are unfamiliar with how to run a business and you don’t have budget restrictions when it comes to the company formation, this could be the most convenient option.
Starting a new business venture can be daunting. If you would rather have peace of mind that all forms are submitted with the right information, getting the help of your accountant makes sense. They will also be able to answer any questions you have, discuss other things you need to put into place, and give you general advice when it comes to business finances.
Bear in mind that this may cost you extra though (it may not be included in their monthly service fee). And you’ll have other ongoing costs to account for when you start running your business, so budget with that in mind.
The cheapest way to form your limited company is to get it free through another service. At Hoxton Mix, we can offer company formation for just £10 via our partner Crunch - with £10 promo credit when you purchase a virtual office plan with us. That means you would be getting your company formation completely free of charge!