Paying for your company
No – I am not talking about some kind of escort agency.
This month I want to bring to your attention the great disparity in what it can cost to set up a company. I have seen charges range from £35 to £1,000+ for, ostensibly, the same thing!
At the lower end there are a number of websites where you can literally form your own company on-line. You sit in front of the screen for anything up to 1 hour filling in details, provide your credit card information, and a few days later a package arrives and you have a company.
The downside of this approach is that you need to understand the importance that can attach to who is director, who is secretary and who holds what shares. There can be implications if this is not correctly set up, especially if shares are transferred between people later on.
At the other end of the scale you can have a company custom formed by an accountant or solicitor. The majority of these use a fairly straight forward formations system with the majority of documents already set up on their word processor – yet I have seen people charged £850 - £1,000 for the same formation.
In the middle are the formation agencies who will charge £85-£125 to form a company for you. They ask you all the relevant questions (but don’t necessarily give advice), fill in the forms and voila! – You’re up and running.
As a guide I would have thought that anything around £125- £200 for a limited company and £250 - £325 for an unlimited company.