subject: TOP 5 Reasons NOT To Use a Company Formation Agent [print this page] TOP 5 Reasons NOT To Use a Company Formation Agent
People often make arguments against using a company formation agent to carry out their company formation. You might have heard them already or perhaps, giving it some thought, you could think of a few yourself. This article is intended to dispel the myths.
1 Using a Company Formation Agent Costs Too Much
This is the first argument that anyone can come up with. Just like with anything else in life people tend to think it's cheaper to do it themselves. Oddly enough though, depending on which agent you use, this isn't the case. I recently wrote an article for our company blog entitled "DIY vs Company Formation Agent" In which I researched and did the workings to find out how much each path would cost. It turns out using a company formation agent actually works out cheaper. The logic is simple. Using an agent means the whole process can be carried out online, which benefits from cheaper Companies House filing fees, less printing costs, less postage costs and less worry. Using an agent to complete the process on your behalf means you don't have to worry about the technical sides of the business like the memorandum and articles of association. The agent does it for you, so you don't have to pay extra for template or sample articles
2 It would be far easier to carry out a company formation myself
This clearly isn't true. It's never easier to do anything yourself than let someone else do it. That might seem like a lazy man's answer, but let me explain a bit more. Unless you know what you're doing and have a good working knowledge of company law and the company formation process, then it is actually going to be more complicated to do it yourself. You will need to carry out research to learn exactly what you need to do and how to do it. You will need to fill out the Companies House forms, draft the articles and memorandum of association and submit them, by standard post to Companies House. If you get it all right and have completed the forms correctly, done the necessary searches and checks before hand and not used a sensitive word in your company name, then you might be lucky enough to have your application accepted first time. Using a company formation agent on the other hand allows you to fill out a few forms online and sit back and let them do the work for you. They will complete all the necessary paperwork online and submit your application, giving you guidance and support where necessary.
3 It would be quicker to complete a company formation myself
Carry out a company formation under your own steam can actually take longer than using an agent. Firstly there is the 18 pages of Companies House form to complete. Once that is done you need to draft the company articles and then ensure all of them are signed by the directors and shareholder of the company. Send all these documents and forms, as well as the filing fee to Companies House. Once they arrive there, your application may take as much as 10 days to complete. On the other hand, using a company formation agent, the registration process is carried out online. Doing it this way means that it can be complete in a number of hours, rather than days. In most cases, agents will have your registration completed within the same day.
4 - They'll rip you off
This is a natural fear when using any business to do work for you. Especially if it's a technical job and you don't know how to do it yourself or what's involved. However, in most cases, using a company formation agent to complete the registration for you is a better way of doing things. You should theoretically pay less than you would if you tried to do it yourself and you will get a more comprehensive service. With guidance and support, you should hopefully benefit from a legally compliant company registration. With legal and tax advice to boot.
5 There are too many to choose from, how do I know who's best?
If you're worried you won't be able to tell the cowboys from the recognised company formation agents, don't worry. Companies House have provided a list of the approved software filing agents. Who to choose from that list is up to you. Every person has different needs and each agent provides a slightly different service.
