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How do you choose a company name that is unique?

Choosing a unique company name begins with identifying words or phrases that reflect your brand’s purpose, values, or target industry. List these keywords, then explore different combinations to see what sounds distinctive and memorable. Once you have a few options, use a company name check tool to confirm whether the name is available for registration.

Once you settle on a name, you can register a company name with Companies House while securing a trademark reflecting your brand identity through intellectual property registration.

This combination of a trademark and business name enhances the value and recognition of your business and extends its appeal. By aligning your name with industry specifics and making it relatable to your target audience, you create a brand that resonates deeply and stands out in the market.

How can you use a limited company name search tool to check availability?

A limited company name search tool helps you verify whether another company already uses the name you’re considering. To use the tool effectively, prepare a list of at least three potential company names, starting with your top choice. This ensures you have alternative options if your preferred name is already taken.

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Using this tool simplifies the name selection process and helps avoid conflicts with unrelated companies that may have similar names. This is critical in creating a unique and legally compliant brand identity.

Suppose your name search indicates that your chosen name is approved but flagged as similar to an existing business name. In that case, you must provide supporting documentation if connected to the existing company. Such connections may include being a subsidiary, an affiliate, or having a formal association. Providing this documentation ensures compliance with regulations, prevents potential conflicts, and avoids any misrepresentation.

See also: Limited Liability Definition

How do you align your choice to company name rules and restrictions?

Companies House provides clear guidelines to help entrepreneurs register a company in the UK. Key legislation governing company naming includes:

• Companies Act 2006
• Company, Limited Liability Partnership, and Business (Names and Trading Disclosures) Regulations 2015 (SI 2015/17)
• Company, Limited Liability Partnership, and Business (Sensitive Words and Expressions) Regulations 2014 (SI 2014/3140)

Flaunting these rules could cause undue delay in your company's registration. It is easier to comply. These rules include - 

• The name you want should not contain words that imply a connection to the UK government or local or specified public authority.

Your name must not include words that suggest a connection to the UK government, local authorities, or any specified public body. Terms such as "Court," "Financial Reporting," "Notary," "Inspectorate," "Authority," or "Assembly" require explicit permission from the relevant governing agencies or institutions. This rule ensures that your company name does not mislead or imply an affiliation with official organisations without proper authorisation.

• The name should not be offensive, inappropriate, or likely to cause harm or offence to any group or individual.

The name you choose must not contain offensive, inappropriate, or harmful terms that could cause offence or harm to any group or individual. Companies House strictly prohibits words that are profane, derogatory, or defamatory. A respectful and professional business environment is essential; your company name should reflect these values.

•  The name must not suggest criminal activity or be contrary to the public interest.

The name must not imply criminal activity or conduct contrary to the public interest. Also, avoid including terms suggesting illegal or unethical practices, as Companies House will not approve such names.

• The name must not infringe on an existing trade mark.

The name must not infringe on an existing trademark. To ensure compliance, conduct a trademark search using the main keywords you plan to include in your business name, which you may later trademark. This step helps you avoid the legal risks of using a protected word or mark. Additionally, it safeguards your brand identity from potential infringement by others, ensuring your business stands on solid legal ground.

Why can’t a business name include sensitive words and expressions without permission?

There are sensitive words and expressions that you cannot include in your company name because they denote special skill, license, or authorisation. Such words include - Accounts Commission, Adjudicator, Auditor General, Accreditation, Association, Bank, Charitable, Chamber of Commerce, and more. To use, you’d require special permission.

Can you use a business name generator to define your brand?

Business name generators are excellent tools for brainstorming potential names for your business. Typically, you start by selecting your industry and providing 1-3 relevant keywords. The generator then suggests a variety of creative name options to consider.

Some generators may ask for additional details about your new business, such as its nature, target audience, or brand personality, to provide more tailored suggestions. These tools can be a valuable starting point in defining a name that aligns with your brand identity and resonates with your audience.

Should you choose "Limited" or "Ltd" for the ending of your company name?

You can use either "Limited" or "Ltd" at the end of your company name, as there is no legal or functional difference between the two. "Limited" is often considered more formal, while "Ltd" is slightly more casual. The choice ultimately depends on the company owners' preferences and branding style.

Find out more: What is the difference between ltd and limited in a company name?

Is the domain name available for your preferred business name?

Though not a legal requirement, it is good practice to check to see if the domain name of your preferred and available name is also available for the company website and email address. This will help you establish a consistent brand and build a web presence that aligns with your identity. 

Company Name Rules Explained

What is a proof of address?

A proof of address is a document that includes your full name and address issued by a trusted third party, such as a service provider. Common examples include utility bills, bank statements, or official correspondence. This document is evidence of your current address and is often required for identity verification.

Banks, financial institutions, and government agencies may request proof of address to confirm to ensure compliance with regulations and facilitate secure communication. 

Are proof of address in England and Wales part of anti-money laundering regulations?

Yes. Proof of address is essential under England and Wales's anti-money laundering (AML) regulations. It is typically requested alongside photographic identification, such as a passport or photocard driving licence, to validate an individual’s identity and ensure compliance with AML measures. Proof of address documents must usually have been issued within the last three months to be acceptable. Examples include a recent local council tax bill, bank statement, or utility bill.

When will you need proof of address in the UK?

Proof of address is required in several situations in the UK, including:

• Opening a bank account: Whether you are a UK citizen or a non-resident, banks will ask for proof of address as part of anti-money laundering (AML) measures and to comply with Financial Conduct Authority (FCA) regulations.
• Applying for credit: When applying for a loan, credit card, or mortgage, financial institutions require proof of address to verify your identity and assess your creditworthiness.
• Buying property: Proof of address is often needed to confirm one's identity and comply with legal and regulatory requirements.
• Acting as a guarantor for a tenant: If you are a guarantor for someone renting a property, landlords or letting agents may request proof of your current address to complete the guarantor process.
• ‍Accessing government services: Certain government services, such as applying for a visa, registering a birth, getting a driving licence or dealing with specific agencies such as the police, may require you to provide proof of address to verify your residency.

What can be used as proof of address when you just arrive in the UK? 

When newly arrived in the UK, providing proof of address without utility bills or other typical documents can be challenging. In such cases, the following alternatives may be accepted:

• A letter or statement from your employer confirming your name and address, provided you have a right to work share code.
• If you are a student, a letter from your university that confirms your residential address.
• A tenancy agreement, if you already have a place to live, serves as valid proof of address.
• Government correspondence, such as letters from HMRC or the NHS that include your name and address.
• An affidavit of residence, where you formally declare your current residence under oath.

How do I get proof of address in the UK?

Obtaining proof of address in the UK typically involves using documents you already have, such as correspondence from government agencies or service providers. Service provider documents should be no older than three months, while government-issued documents dated within the past 12 months may be accepted.

Acceptable proof of address documents issued in the last 3 months:

• Utility bills, such as gas or electricity.
• Bank statements or letters confirming account details.
• A letter from a solicitor confirming a recent property purchase or land registry records.

Acceptable proof of address documents issued within the last 12 months: 

• A mortgage statement from a recognised lender.
• A council tax bill from your local authority. 
• A rent card or tenancy agreement from a council or housing association.
• P45 or P60 documents related to income tax.
• HMRC correspondences, including self-assessment notifications or tax demands issued within the current financial year.
• An entry in the Electoral Register confirming your residence details.

How can I open a bank account in the UK without proof of address?

Opening a bank account in the UK without proof of address is possible through online or challenger banks. These banks have simplified account setup processes and often waive the requirement for traditional proof of address. Popular options include:

• Wise
• Monzo
• Starling
• Monese
• Zempler 
• Suits Me
  

These banks operate online via desktop platforms or mobile apps, offering a convenient alternative to traditional banking. To open an account, review the bank’s policies and required documentation, which may include basic identity verification like a passport or ID. 

Once you’ve chosen the right bank, download their app or access their platform and follow the steps to set up your account.

What documents are accepted as proof of address by major UK banks?

Unlike digital challenger banks, high street banks in the UK are traditional organisations that require proof of address to open an account. Commonly accepted documents include:

• Recent utility bills (usually within the last 3 months) showing your name and address.
• Official letters, such as those from HMRC, and tax bills that include your name and address.
• A letter from a solicitor confirming your recent property purchase or tenancy.
• A signed agreement for your current residence.

Each bank may have specific requirements, so it’s always best to check directly with the institution to ensure you have the correct documentation.

Can the document that counts as proof of address be used for proof of identity?

No, a document used as proof of address cannot independently serve as proof of identification. Proof of address supports identity verification but cannot replace proof of identity, which typically requires a photographic document, such as a passport or driving licence. While evidence of address adds credibility to the verification process, it cannot stand alone as a substitute for photographic identification. Likewise, a document that serves as proof of identity, cannot be used for both proof of id and address. 

Do proof of address documents need notarisation?

Proof of address documents generally do not need notarisation unless explicitly required by the institution requesting them.

5 Things To Know About Proof of Address UK

Why start a cleaning business?

Are you thinking about starting a new business with low startup costs, steady demand, and room for growth? The cleaning industry might be your best bet. According to a 2024 report by the British Cleaning Council, the sector contributed over £60.3 billion to the UK economy in 2021 and shows no signs of slowing down. 

Here’s why launching a new cleaning business is a smart move:

• Scalability: Start small and expand as demand grows, offering a low-risk, high-reward business model.‍
• Strong industry growth: A thriving sector with rising demand in residential, commercial, and industrial markets.‍
• Flexible workforce: 67% of cleaning staff work part-time, helping businesses reduce payroll costs, scale efficiently, and adjust staffing.‍
• Easy entry: Most sub-industries require no special licenses or advanced qualifications, and only 25% of the workforce holds an NQF Level 4 qualification, making it accessible to new entrepreneurs.

What are the different types of cleaning services?

The cleaning industry spans multiple sectors, from home and office cleaning to large-scale industrial operations. Below is a breakdown of key cleaning service categories, their economic value, and the type of business owners they are best suited for.‍

‍Cleaning and hygiene services

According to the British Cleaning Council (BCC), the cleaning and hygiene sector contributed £9.4 billion to the UK economy in 2021. With low skill requirements and high profitability, this industry offers an accessible and lucrative opportunity for small business owners, self-employed cleaners, and cleaning franchises looking to establish or grow their businesses.

The main business activities within the sub-industry are:

• General Cleaning of Buildings (SIC 81.21) includes routine cleaning services for homes, offices, schools, public spaces and specialist services such as oven cleaning.‍
• Other Building and Industrial Cleaning (SIC 81.22) include window cleaning, hospital sanitation, computer room cleaning, and chimney services.‍
• Other Cleaning Activities (SIC 81.29) cover disinfection, pest control, swimming pool cleaning, and transport cleaning (trains, buses, planes, etc.).

‍Facilities Management 

The sub-sector contributed £30 billion to the UK economy in 2019, making it one of the most significant industries within the broader cleaning and maintenance sector. Facilities management goes beyond cleaning, encompassing the maintenance, security, and operational management of buildings and workspaces. 

The main business activities within the sub-industry include:

• Combined Facilities Support Activities (SIC 81.10) – Covering security, catering, building maintenance, and operational services, often bundled with cleaning contracts.
• Real Estate Management (SIC 68.32) – Managing properties and maintenance contracts on behalf of landlords, commercial property owners, and corporations.
• Renting & Leasing of Office Machinery (SIC 77.33) – Providing office equipment, IT support, and machinery leasing, including cleaning and maintenance solutions.

Landscape Activities 

According to the British Cleaning Council (BCC), the landscape activities sector contributed £5.6 billion to the UK economy in 2021. With routine maintenance and specialised services, it offers opportunities for small business owners, independent landscapers, and larger firms providing contract-based outdoor maintenance.

The main business activities within the sub-industry include:

• Planting, Caring for, and Maintaining Green Spaces: Providing landscaping, gardening, and tree care services for residential and commercial properties.
• Public and Semi-Public Grounds Maintenance: Managing municipal parks, urban landscapes, and roadside greenery for local councils and government agencies.
• Sports Grounds and Industrial Landscaping: Maintaining golf courses, stadiums, and large-scale industrial green spaces to ensure aesthetic appeal and safety compliance.

With an increasing emphasis on sustainability and green spaces, businesses in this sector benefit from consistent demand, recurring contracts, and opportunities for specialisation in areas such as eco-friendly landscaping, urban rewilding, and sustainable outdoor design.

Waste and resource management 

The waste and resource management sub-industry contributed £15 billion to the UK economy in 2021, with waste collection generating £9.8 billion and waste treatment and disposal contributing £5.2 billion. As environmental concerns grow and regulations tighten, waste management has become a high-demand industry with opportunities for municipal contractors, private waste collection businesses, and recycling firms.

The main business activities within the sub-industry include:

• Waste Treatment & Disposal (SIC 38.21 & 38.22): Processing non-hazardous and hazardous waste, including landfill management, incineration, and recycling operations.
• Waste Collection (SIC 38.11 & 38.12): Handling residential and commercial waste removal, including general refuse, recyclables, and hazardous waste.

With increasing government regulations on sustainability, recycling, and landfill reduction, businesses in this sector benefit from steady contracts, compliance-driven demand, and expansion opportunities in areas like composting, electronic waste recycling, and circular economy initiatives.

Manufacturing and supply 

The manufacturing and supply sub-industry supports B2B and B2C markets, supplying essential cleaning products and equipment to commercial cleaning companies, industrial facilities, and individual consumers.

The main business activities within the sub-industry include:

• Cleaning Products Manufacturing: Production of soaps, detergents, disinfectants, and industrial cleaning chemicals used in residential, commercial, and industrial settings.
• Cleaning Machinery & Equipment Supply: Manufactures and distributes pressure washers, scrubber dryers, floor cleaning machines, and other specialised equipment.

With a rising demand for eco-friendly, biodegradable cleaning solutions and advanced automation in cleaning technology, businesses in this sector benefit from high recurring sales, scalability, and opportunities in innovation-driven product development.

What are the different types of cleaning companies?

The cleaning industry is diverse, with different business types and registration formats catering to various cleaning activities. Whether you're an independent cleaner, a property manager, or a group of leaseholders, there is a business structure that fits your needs. Here’s how different types of cleaning companies align with cleaning services in the UK.

Sole Trader – Ideal for General Cleaning of Buildings (SIC 81.21)

For solopreneurs looking to start a small-scale cleaning business, registering as a sole trader is one of the easiest ways to enter the industry.

Best suited for:

• Small commercial cleaning contracts for offices, retail stores, and restaurants.
• Domestic cleaning businesses, including home cleaning, Airbnb cleaning, and end-of-tenancy cleaning.

As your business grows, you can transition into a private limited company and expand into other cleaning activities under SIC 81.22 or SIC 81.29.

Private Limited Company (LTD) – Ideal for Industrial & Specialized Cleaning (SIC 81.22, 81.29)

For those who want a formal business structure with liability protection, registering as a private limited company (LTD) offers credibility and growth opportunities.

Best suited for:

• Industrial cleaning, including factories, warehouses, and medical facilities.
• Specialised cleaning may include window cleaning, hospital sanitation, pest control, and transport cleaning.
• Commercial cleaning with large contracts requiring employees and equipment.

You can acquire industry licenses, hire specialists, and expand into regulated cleaning services with an LTD.

Limited Liability Partnership (LLP) – Ideal for Business Partners in Cleaning

An LLP allows two or more partners to operate a cleaning business while limiting personal liability. This structure is ideal if you want to combine expertise with a partner.

Best suited for:

• Franchise cleaning businesses allow multiple partners to manage locations under one brand.
• Janitorial services with long-term contracts in offices, schools, and healthcare.
• Facilities management cleaning, where a partner brings security, catering, or maintenance expertise.

An LLP provides flexibility, allowing partners to divide responsibilities between administration, client acquisition, and service management.

Right to Manage (RTM) Company – Ideal for Managing Communal Area Cleaning

Tenants or leaseholders form an RTM company to manage their residential building. While an RTM cannot operate as a commercial cleaning business, it can hire contractors or manage an in-house cleaning team.

Best suited for:

• Ensuring service quality and cost efficiency in apartment blocks and flats.
• Cleaning and maintenance of communal areas in residential buildings (hallways, staircases, gardens).

Although RTM companies don’t offer commercial cleaning services, they are crucial in ensuring high cleaning standards for their properties.

Property Management Company – Ideal for Overseeing Multiple Cleaning Contracts

A property management company provides comprehensive maintenance services, including cleaning services, for multiple properties. Unlike an RTM, a property management company can expand into the commercial cleaning sector and offer services to multiple landlords.

Best suited for:

• Providing in-house cleaning staff or outsourcing contracts to cleaning companies.
• Coordinating cleaning services for residential and commercial properties.
• Facilities management cleaning (SIC 81.10), including janitorial services, security, and building maintenance.

Property management companies can offer cleaning as part of a larger service package or register a separate cleaning business under their company structure.

What type of cleaning services should I offer? 

One of the first steps in starting a cleaning business is deciding whether to offer residential or commercial services. Choosing the right niche is essential for shaping your business model, pricing, and operations.

• Residential cleaning focuses on family homes, apartments, and rental properties. Services typically include routine housekeeping, deep cleaning, and move-in or move-out cleans.
• On the other hand, commercial cleaning operates on a larger scale—serving offices, retail spaces, and industrial buildings. It often involves specialised equipment, larger teams, and more flexible scheduling, including overnight work.

Understanding the differences between these markets will help you tailor your services, choose the right tools, and meet the expectations of your ideal clients.

How do I set up a cleaning company and choose an ideal business structure?

Registering a limited company with Your Virtual Office London ensures liability protection and professional business identity for your cleaning business from day one. The process is simple: provide a preferred business name, shareholding details, company officials' information, and the relevant SIC code. 

The Privacy Package covers all essential registration requirements, including incorporation fees, a registered office address, and a director’s service address, giving you a fully compliant and professional setup with minimal hassle.

Alternatively, you can purchase a cleaning franchise, which provides everything you need to launch successfully. With a franchise, you benefit from an established brand reputation, essential tools, and comprehensive training, allowing you to bypass many of the challenges of starting from scratch. This option offers built-in credibility, proven business systems, and a ready-made customer base. It is an excellent choice for those looking to reduce risk and start with a competitive advantage.

What is the cost to start a cleaning venture?

The cost of starting your own cleaning business depends on your preferred business structure and the specific services you plan to offer. You don't need a significant upfront investment—many successful cleaning ventures start small and grow steadily over time.

Below is a breakdown of estimated startup costs based on different business models and types of cleaning services.

Business Registration Costs 

• Limited Company Formation: The cost starts at £68, including Companies House fees and everything required to register your business legally.
• Sole Trader: Registration is free, making it the most cost-effective way to start a cleaning business.

Cleaning Supplies and Tool

Once you’ve identified your cleaning niche, you can plan for the cost of equipment and tools based on the type of cleaning services you intend to offer.

Residential Cleaning (SIC 81.21) – Estimated Cost: £1,250

For a general residential cleaning business, expect to budget:

• £550 – Essential cleaning equipment (vacuum cleaner, mops, buckets, cleaning solutions, gloves).
• £700 – Website and marketing expenses to attract clients.
• £200 – Small business liability insurance to cover potential damages or accidents.

Industrial & Specialised Cleaning (SIC 81.22, SIC 81.29) – Estimated Cost: £3,000+‍ 

For industrial, commercial, and specialised cleaning, additional equipment may be required, including:

• £1,200+ – Floor cleaning machines for large-scale surface cleaning.
• £800+ – Carpet cleaning machines for deep cleaning.
• £300+ – Janitor cart for organising cleaning tools and supplies.

Other Essential Cleaning Tools – Estimated Cost: £150+

Regardless of your niche, you may need additional tools, such as:

• £25 – Feather duster for dusting surfaces.
• £30 – Micro-fiber towels for streak-free cleaning.
• £50+ – Various disinfectants and cleaning chemicals for specialised jobs.

Licensing costs for specialised cleaning business leaning

You may need licenses for specialised cleaning services (e.g., medical, hazardous waste, or pest control under SIC 81.22 or SIC 81.29). Depending on the specific industry regulations, these can add £500–£2,000 to your startup costs.

How do I create a business plan for my business?

A business plan is essential for outlining your goals, strategies, and financial projections. If you're unsure where to start, AI tools can help you draft a professional business plan quickly and efficiently.

Simply provide details about your business type, target market, services offered, pricing, and growth strategy, and AI can generate a structured plan tailored to your needs. This can include sections on market research, competitor analysis, operational planning, and financial forecasts, helping you stay organised and attract potential investors or clients.

What license do I need to start a cleaning company in the UK?

When starting a cleaning business in the UK, you generally do not need a specific license. However, you should register your business appropriately:

• Limited Company or LLP: Register with Companies House.
• Sole Trader: Register with HMRC when your annual turnover reaches the self-assessment registration threshold of £1,000.

For general residential and small commercial cleaning, no additional licenses are required. However, if you plan to specialise in certain cleaning services, you may need specific licenses or certifications as follows

For industrial cleaning, if you plan to use hazardous chemicals such as ammonia, bleach, or other potent cleaning agents, you should:

• Supply personal protective equipment (PPE)
• Conduct a COSHH risk assessment
• Provide appropriate staff training

Paying tax for your cleaning service?

Your tax obligations depend on your chosen business structure:

• Limited Companies: Pay Corporation Tax and must file annual tax returns with HMRC.
• Sole Traders: Pay taxes through self-assessment and must register with HMRC if earnings exceed £1,000 per year.

Understanding your tax responsibilities ensures compliance and helps you manage finances effectively.

What is a correspondence address?

A correspondence address, also known as a service address, is the location where company officials including directors, secretaries, and people with significant control (PSCs), choose to receive statutory mail from authorities such as Companies House and HMRC related to their role.

As you consider getting a correspondence address, please note the following — 

• Your physical presence is not required — No company representative must be at the address.
• Flexible —You are not required to carry out your business or trading activities at the address. 

Authorised Acknowledgment — Any designated individual can acknowledge receipt of correspondence on behalf of a company official, streamlining communication processes.

What are the benefits of a correspondence address?

An official correspondence address is more than just a mailing location; it plays a vital role in defining your business operations and protecting your personal privacy. Benefits of having one include —

• Your official postal address ties you to a legal jurisdiction — As a company officer, your designated address establishes the legal framework governing your business and personal responsibilities in your official capacity. This address is critical in assessing your compliance and conduct.
• Provides privacy and security — Using a designated address other than your residential or business address helps protect your privacy. As a limited company director, your name, nationality, occupation, and service address are publicly accessible. To meet legal obligations while maintaining confidentiality, consider using a director address service for added security and peace of mind.
• Enhances credibility with a professional image — A prestigious central London address signals professionalism and accessibility, fostering trust and reliability. This strengthens your credibility and enhances the perception of your expertise and reliability in your professional role.

What is a residential address?

A residence is where you live independently or with your family for at least 183 days a year and is often used for official identification and legal purposes. It connects you to a particular jurisdiction and is usually required for various government processes, legal agreements, and identification documents. 

Legal reasons why a residential address is necessary include — 

• Legal residency requirements — A home address complies with legal residency stipulations requiring a minimum residency period for individuals to enjoy certain rights and obligations in the UK. 
• Taxation — Authorities may use your primary place of residence to determine your tax obligations and eligibility for benefits. For example, if you are a UK resident, you are subject to UK tax on worldwide income and gains. 
• Legal jurisdiction — Your home address determines the laws and regulations governing your life, including contractual obligations, property rights, and family law matters. 
• Government services — A valid connection to the UK as a resident determines your eligibility for government services such as education, healthcare, and social services. After the government conducts a census, public planning, budget allocation, and infrastructure development are determined mainly by the number of people living in a particular area and their characteristics. 

What is a residential delivery address?

A residential delivery address is where an individual lives and receives personal deliveries, such as mail and packages. It can also be used for both personal and official correspondence. However, Companies House will make this address publicly available when used for official purposes, especially as part of company formation requirements.

See also: Address Line 1 And Address Line 2: Examples & Applications

What is the difference between a residential and a postal address?

The difference between residential and postal addresses is their purpose and usage. In the UK, a residential address refers to the physical location where a person resides and is often recognised as their official residence. To qualify as a residential address, an individual must have lived there for a specific number of days.

On the other hand, a postal address is explicitly designated for receiving mail and parcels. Unlike a residential address, a PO Box address can be set up and used immediately, even if acquired on the same day. This flexibility makes postal addresses ideal for businesses or individuals requiring a separate correspondence address.

What is the difference between a residential address vs physical address?

A residential address refers to the location where an individual lives. In contrast, a physical address is a broader term that can refer to a business or residential address. It often highlights that the address is an actual location, not a PO Box.

Can I use my home address as my correspondence address?

You can use your home address as your correspondence address to register your company. However, remember that this address will be publicised on the Companies House register.

What is the difference between correspondence address vs commercial address?

Companies House requires each company official to maintain a correspondence address for receiving statutory mail from government agencies related to their role.

A commercial address, on the other hand, refers to a location used for business purposes. It can be the physical site where commercial activities are conducted or a trading address for receiving letters from partners and other businesses.

What is the difference between a mailing address vs correspondence address service?

The difference between mailing and official addresses depends on the context. In business administration, a correspondence address is where company officials can receive official mail, such as legal notices, government letters, and statutory mail. The address establishes a clear channel for official correspondence to reach the appropriate individuals within the company.

Can I use a virtual address as a correspondence address? 

Yes, and here is why. Despite the term 'virtual,' a virtual address is a tangible, real-world street address. It doesn't imply nonexistence but reflects its flexibility and ability to manage or access your correspondence through digital platforms. A virtual address operates physically, providing a genuine location for correspondence needs. The service includes mail forwarding.

How do I change the address of the correspondence with Companies House?

You can change your correspondence address with Companies House online or by post. Log into WebFiling with your email address and password to use the online option. 

Alternatively, you can amend the correspondence address of your company officials by post using the following forms —  

• CH01 – Change of director’s details
• CH03 – Change the details of a secretary
• PSC04 – Change of details of individual person with significant control (PSC)

What is the difference between registered office address and service address?

The main difference between the registered office address and the service address is in their functions and requirements. A registered office address is the official point of contact between the government and the company, while the service address is specific to company officials. Both are required as part of a company formation application with Companies House and are published in the public register. 

What is the difference between a correspondence address vs residential address?

A Correspondence Address is typically designated for receiving official, business-related mail and communication from government agencies.  It serves as a point of contact between the government and the officials of a company. On the other hand, a residential address refers to the place where an individual resides or lives. It is a personal address associated with one's home and is often used for various purposes, including official documentation, personal correspondence, and legal records.

Can you use your residential address as your correspondence address?

If you use your residential address as your correspondence or service address with Companies House, it's essential to know that this information will be publicly available. Such exposure may open you up to potential privacy concerns and unsolicited communications.

What's the difference between a correspondence address & a permanent address?

As the name suggests, a residential or permanent address is where you live for at least 183 days a year. Conversely, a correspondence address does not have to be a habitable space; any location that can handle and receive your mail can be a correspondence address. 

Can I use a correspondence address for both personal and business needs?

Yes. You can use a correspondence address for both personal and business needs. However, the director's address, referred to as the service address, will be publicly available. To maintain privacy, it's advisable not to use your home address. You can use the same address to receive personal and business-related correspondence.

As the name suggests, the director service address is provided by the individual directors, while the registered office address represents the official correspondence address of the company.

What Is a director's service address?

It is the address government agencies will use to send statutory correspondence relevant to the role of the director. Official letters from HMRC, Companies House, courts, the Office of National Statistics, and other agencies will be sent to this address.

Every director needs to provide this information during company formation or at the time of appointment. The address can be residential or commercial, but remember that Companies House will display it in the public register. We always recommend using a non-residential address to protect an individual's privacy.

What Is a registered office address?

Statutory letters in the company name will be sent to the registered office address. Please note that starting March 2024, owing to the Economic Crime and Corporate Transparency Act, which became law in October 2023, a registered office address must be a physical address, not a P.O. Box.

In addition to the office address, the Act also requires all companies to provide a registered email address. Companies House will use this email address to communicate with the company, and it will not be available to the public.  

Starting 4 March 2024, newly incorporated companies must provide a registered email address during the incorporation process. For existing companies, the requirement applies when filing their subsequent confirmation statement, beginning from a statement date on or after 5 March 2024

Can I use my home address as my director service address?

Yes. Technically, you can use your home address as your director service address. However, since this information will be publicly available on the Companies House register, it's essential to consider the implications. Using your home address may impact your privacy and expose personal details to the public. 

Opting for a separate director service address, such as the one provided by Your Virtual Office London, ensures a professional image, safeguards your privacy, and complies with regulatory requirements. Our solution allows you to maintain a level of separation between your personal and professional identity.

Can I use a virtual office address as my director's address?

Yes, using a virtual office address as your director's address is common and legal. You get to present a professional image for your business and streamline statutory communication, as the virtual office can handle mail and other communications on your behalf.

What is the difference between a registered office, business address, and service address?

The terms "registered office," "business address," and "service address" refer to different addresses associated with a company, each serving a distinct purpose. Here's a breakdown of their differences —

Registered Office Address

Also known as the legal correspondence address, it is the official address of a company or LLP used for legal and official correspondence, and with the appropriate permissions, you can use either a residential or non-residential address. Government agencies, regulatory bodies, and the public send statutory letters and official documents to this address. Such correspondence may include—

• Official documentation regarding changes in company structure or details;
• Official company documentation from Companies House;
• Legal updates, notices and summons;
• Compliance information and reminders;
• Correspondence from HMRC; OR
• Important notifications related to the company.

The law requires that companies maintain a registered office address, which must be a physical location in the country where the company is registered.

Business Address

Also known as a trading address, it is the general address associated with the company, used for general business correspondence from customers, clients, and suppliers. It can be a physical location or a virtual office. Unlike the registered address, you are not required to observe the exact legal requirements. There is no legal definition for a business or trading address. 

Service Address

Also known as the director address, it is the official address of company directors, secretaries, and other officers registered with Companies House. It is used for official communication related to the individual's role in the company.

Similar to the registered office address, having a service address is a legal requirement. It helps protect the personal information of limited company officers.

What is the difference between a home and a correspondence address?

The terms "home address" and "correspondence address" refer to different addresses associated with individuals and serve distinct purposes. The home address is the residential address where an individual resides. It is primarily used to identify the location of an individual's residence and is associated with personal matters.

The home address is used for various purposes, including personal mail and official documents, and as a point of contact for personal matters.

On the other hand, a correspondence address is designated by an individual for receiving official correspondence. Individuals may get a correspondence address if they prefer to receive certain types of mail or communications at a location other than their home address.

Let's dive into what happens when you receive a notice from Companies House about your company facing a possible strike-off.

What Is a Compulsory Strike Off?

It is a term used to refer to an action taken by Companies House to remove a company from its register so that it is formally dissolved and ceases to exist. Companies flagged for strike-off are usually not actively trading or consistently fail to meet legal and regulatory responsibilities such as filing accounts or confirmation statements. 

How does the compulsory strike off process work?  

The Registrar of Companies will mark a company for compulsory liquidation for the following reasons. 

• Failing to comply with statutory filing requirements — One of the top reasons the Registrar may forcibly strike off a company is failure to comply with filing requirements such as confirmation statements and accounts. Beyond being struck off companies and its directors may face serious consequences, including potential criminal or personal liability charges for non-compliance.
• Not actively trading and failing to comply with dormant company requirements — If a company is not actively trading and fails to meet the requirements of a dormant company, it exposes itself to the risk of being struck off. 
• Absence of a director — When a company's sole director resigns or is removed by a shareholder vote, leaving the company without directors, it makes it eligible for strike off.
• Failure to notify the Registrar about a change in their registered office address — Neglecting to inform the registrar of a change in your registered office address can cause the company to be struck off. 

However, if you fulfil all of your legal obligations and have reason to believe that the strike-off notice is unfair, you can send an objection application to Companies House. If your reasons are viable and you provide satisfactory evidence, the process will be discontinued. 

For any company that fulfils any of the above conditions, the Registrar of Companies for England and Wales, Scotland, and Northern Ireland may initiate the process of striking them off the register as follows — 

1. Companies House inquiry

The process starts with Companies House sending letters to inquire about the business's current trading status and giving them 14 days to respond. In the absence of a reply, a follow-up letter with identical inquiry is issued, granting an additional 14 days for a response.

2. Issuance of a first gazette notice for compulsory strike

If the company fails to respond to the second letter of inquiry, Companies House issues a notice published in the Gazette in London, Edinburgh, or Belfast—depending on the geographical location of the company’s registered office. 

The primary purpose of this notice is to declare their intention to strike off the company formally. It serves a dual role: providing management with an opportunity to take corrective measures and allowing creditors (including HMRC or former employees owed) the chance to raise objections. 

Remember, the strike-off implies that the company will cease to exist, preventing creditors from pursuing and collecting outstanding payments.

3. Second Gazette Notice

If there is no response to the first notice, a second notice is published, providing a final opportunity for any concerned party to correct or object to the closure.

4. Dissolution and Cessation of Business

If there are no objections and the company officials take no action, the company is removed from the register and ceases to exist.

5. Asset Forfeiture

The Crown may claim assets, such as cash, machinery, or buildings, under the 'bona vacantia' (meaning ownerless goods) principle.

Directors may face an investigation into potential misconduct that led to the strike-off. If wrongdoing is found, it could lead to disqualification and even personal liability for company debts.

What Is Voluntary Strike Off?

According to section 1000 of the Companies Act 2006, a voluntary strike off is a process initiated by company directors to remove the company from the register and essentially close it down. It happens when a company is no longer in active business, and directors are happy for the company to close. 

A business that fulfils the following conditions is eligible for voluntary strike off —

1. During the three months before the application for voluntary strike-off, the company should not have conducted any business transaction.
2. The company must have kept its name the same within the last three months.
3. It should be financially stable and not at risk of liquidation.
4. There should be no outstanding agreements with creditors, e.g., a Company Voluntary Arrangement (CVA), to avoid unresolved issues hindering the voluntary strike-off.

If the entity meets the above criteria, it must ensure that — 

• All tax and debt liabilities have been addressed and settled for a clean financial record before closing.
• The company in question should make its employees redundant and pay their final wages if applicable. HMRC should also be informed that the company is no longer an employer.
• Business assets should be appropriately distributed among shareholders according to the company's structure and agreements.
• It filed its final annual accounts and Company Tax Return with HMRC to provide a formal record of the company's last trading period and impending closure. 

In essence, meeting the eligibility criteria for voluntary strike off allows the company to wind down its operations systematically. Ensuring the resolution of financial and employee-related matters, proper asset distribution, and finalising the necessary documents with HMRC contribute to a smooth and legally compliant closure process.

A copy of the strike off application needs to be sent within seven days to the following parties potentially impacted by the liquidation so that they do not object —

• Members/shareholders
• Creditors
• Employees
• Managers or trustees of any employee pension fund
• Directors who did not sign the application form

The request for the company's strike-off will be publicised as a notice in the local Gazette if the form has been accurately filed. After two months without objections, the company will officially be off the register. Subsequently, a second notice will be Gazetted to confirm the official closure of the company.

What is the difference between voluntary and involuntary strike off?

How can a company avoid compulsory strike off after receiving a request to strike?

If you want to avoid an involuntary strike-off, send an objection application to the Registrar of Companies as soon as possible. To make and submit it, you’ll need - 

• To sign in to or create a Companies House account;
• Details of the company facing the strike off; and
• Evidence to support the objection, for example, invoices showing the company is still trading or owing a debt. These documents must show the company's full name and be at most six months old. 

Furthermore, the company should ensure that all their annual accounts and confirmation statements are filed on time. If you need extra time to get your filings in order, please communicate with Companies House. 

When can creditors object to a compulsory strike-off?

Creditors and concerned parties, including shareholders, can object to a strike-off after the issuance of the first gazette notice. The gazette notice serves as public notification about the Registrar of companies intent to be strike it off the register.

Why would a company compulsorily be struck off the register?

A company is usually subject to involuntary strike-off from the register when it fails to meet statutory requirements, including the timely submission of accounts and confirmation statements. The directors, shareholders, and external creditors like suppliers and HMRC have a two month window to raise objections against the application. If no objections are presented, the company will be struck-off from the register, leading to its dissolution.

What do I do after Getting the Gazette First Notice for Company Strike Off from Companies House?

Once you receive the first notice, you have two to three months to rectify the situation. Here are steps to consider —

1. Determine the reason for the strike off — To remedy the situation, address the reason behind the notice, which may involve submitting your filings or proving that you are still operational.
2. Apply for suspension — If you need more time to remedy the reasons behind the strike-off notice, prepare and lodge a suspension application to Companies House.
3. ‍Address outstanding issues — Clear any fees and taxes and update your filing requirements to stop the process from proceeding to the next step.

Can I stop a compulsory striking off notice?    

Yes. You can halt a compulsory striking off notice directed at your company by resolving the underlying issues specified in the notice.

You can also apply to object to a company being struck off using a Companies House account if, for instance, it's indebted to you. Have the company details and documentation demonstrating that the company is still actively trading or has outstanding arrears. 

FAQs 

What if my company is insolvent?

If you want to close your company but it is insolvent, do all you can to avoid a compulsory strike-off, which will have negative consequences. Instead, you can opt for —

• Creditor’s Voluntary Liquidation (CVL), which involves appointing an insolvency practitioner to liquidate assets and distribute them proportionally to outstanding creditors. 
• Company Voluntary Agreement between the company and its creditors allows it to continue trading under the supervision of an insolvency practitioner and pay its debts over time. 
• Pre-packed Administration - The company can continue to trade under a pre-packed administration, which entails negotiating a sale of the company's assets before formally entering administration. By doing so, the business can swiftly transition to new ownership, potentially preserving jobs and ongoing operations.

Compulsory strike off consequences - What if I have assets in my company?

In the event of a compulsory strike-off, company assets will not remain under your control, nor will they be distributed according to the company's plans. These assets will be released to the Crown. It's essential to be aware of this consequence, as it emphasizes the importance of promptly addressing the compulsory strike-off notice and considering alternative options to safeguard your company's assets.

What are my options following a request to strike off?

Suppose a third party has forcibly struck your company off the Companies House register. In that case, you have the following options: if you – 

• Have no outstanding arrears obligations and all assets have been realised simply allow the process to run its course. 
• Believe the strike off is unjust, or the details are incorrect, you’ll need to prepare and submit a suspension application and engage the registrar for it to be discontinued. 
•  What to embrace the strike off but have assets and unpaid obligations, best pursue a voluntary liquidation. 

How can I restore a company to the Companies House register?

Depending on the circumstances, there are two main ways to restore a dissolved company: administrative restoration and restoration by a court order. 

1. Administrative restoration

You can only apply if the — 

• Person or entity seeking the restoration was a director or shareholder
• Company was struck off the register and dissolved by the Registrar of Companies within the last 6 years
• Company was trading at the time it was dissolved

You apply for administrative restoration by sending to the Registrar a — 

• Completed application for administrative restoration (form RT01)
• Cheque for £100, payable to ‘Companies House’
• Any outstanding documents, such as accounts or confirmation statements
• Any filing fees or penalty payments

if your company had assets, a waiver letter from Bona Vacantia.

If your application has been successful, your company will be restored as soon as the registrar sends you a confirmation letter.

If your application is refused, you might be able to:

• apply for a court order to have your company restored
• get a discretionary grant (if you were a shareholder and need to claim some money back)

2. Court order restoration

You may be able to apply for a court order to restore a company if you:

• Did business with them
• Was an employee
• They owed you money at the time of the closure
• Were responsible for their employee pension fund
• Have shared or competing interest in land
• Were a shareholder or director when it was dissolved

To apply for a court order restoration in England and Wales, download and fill Form N208.

For assistance in completing Form N208, access guidance notes from the HM Courts and Tribunals service. 

Next, you’ll need to find the company’s registered office and send the completed form to their nearest bankruptcy county court. Contact the Royal Courts of Justice if you need clarification on the appropriate court.

Include the following with the application:

1. A £280 court fee (cash, postal order, or cheque made payable to ‘HM Courts and Tribunals Service’)
2. A witness statement incorporating the supporting details specified in section 4 of the Treasury Solicitor’s Guide to company restoration.

In Scotland:

Apply to the Court of Session if the paid-up capital of the company's shares exceeds £120,000.

For other companies, apply to the local sheriff's court. Subsequently, serve a ‘petition to restore’ on the Registrar of Companies in Scotland and any additional entities as directed by the court.

In Northern Ireland:

Submit an ‘originating summons’ to the Royal Courts of Justice using the address below.

Send a copy to the Registrar of Companies in Northern Ireland and a supportive witness statement.

Upon acceptance of the claim, the court will issue an order to restore the company. Forward this order to the Registrar of Companies. Once received, the Registrar will proceed with the restoration of the company.

Consequently, take the following steps to pursue outstanding payments:

• Obtain a ‘judgment’ from the court, specifying the debt amount, interest, and costs.
• Issue a statutory demand.
• File a winding-up petition.

A company limited by guarantee is a type of limited company in the UK registered to advance the objectives of non-profits such as clubs, charities, societies or any other institution seeking to function under the protection of limited liability.

See also: What does limited liability mean?

Company Limited by Guarantee

As stated, a private company limited by guarantee is registered with Companies House, the official registrar of companies. Unlike a private limited company (ltd), the company does not have shareholders or a framework for raising funds through share capital. However, it has guarantors whose liability is limited to the value of the nominal guarantee they pledge. 

Formation Requirements

• Company name, subject to the same rules as one limited by shares.  
• Director and guarantor details, including name, date of birth, nationality, residential address, and service address. Guarantors can be individuals or a corporate body with perpetual succession. 
• Governing documents, which include articles and memo of association. 
• Details of persons with significant control (PSCs), including full name, date of birth, nationality, residential address, service address, nature of control, and three security details for online signature.
• A registered office address.
• Bank details.
• A service address for the initial subscribers, which will appear in the company public register.‍
• Standard Industrial Classification (SIC) code that describes the business activity.

Read also: Director Service Address vs Registered Office Address 

Key Features

• The company is a legal person separate from its owners.
• Offers limited liability protection, restricting the liability of the members to the value of the guarantee provided at the point of formation. 
• Incorporated and regulated by the Registrar, subject to the Companies Acts. 

Company Structure

A company limited by guarantee works through the following structure — 

• Directors (at least one) — Like a Ltd, members must appoint directors to manage its day-to-day operations. 
• Committee and powers — Directors can delegate certain responsibilities to sub-committees. 
• At least one guarantor — Similar to shareholders, they guarantee to pay a certain sum in case of insolvency. 
• Meetings and voting — The members can attend meetings, vote, appoint, and remove directors. 
• Company secretary — The CLG may opt to appoint a company secretary who helps the director oversee that the company complies with all statutory requirements. 
• A service address for the initial subscribers appears in the company public register.
•  Standard Industrial Classification (SIC) code that describes the business activity.

Filing Requirements

The CLG must file the following documents with the company’s Registrar — 

• Annual confirmation statements 
• Annual accounts
• Report company changes 
• Accounts and company tax returns for HMRC
• VAT Returns, PAYE reports, and Self Assessment tax returns (as relevant)

The company must also maintain a register of members and a register of Persons With Significant Control. 

Suitability

A company limited by guarantee is suitable for membership ventures seeking to pursue non-profit objectives for the benefit of the members under limited liability protection.

Company Limited by Guarantee Charity

Depending on the registration process, two main types of charity companies are limited by guarantee. These are —

• A charity company is a CLG registered with the Registrar and the Commission. 
• Charitable incorporated organisation (CIO), a CLG registered only with the Commission.

Formation Requirements (Charity Company)

On the side of Companies House registration, the following are the requirements for registering a charity company.

• To register, it is essential to ensure the charity name is available by searching both the company and charity register. 
• The directors of the CLG automatically become the trustees of the charity company, and new trustees can also be appointed to add to the number. 
• Objectives must pass the public benefit test. 
• Governing Documents, including the articles and memorandum of association.
• Registered office address and bank details.

Key Features

• The company is a separate legal entity from the trustees and guarantors
• Liability is limited to the value of charity assets 
• A charity is answerable to both the Registrar of Companies and the Commission.

Structure

It works through the following structure — 

• Trustees who are responsible for running the entity. 
• Guarantors are members of a company limited by guarantee continue to support the objectives of the venture. 
• PSCs or beneficial owners who exercise control over the company.

Filing Requirements

The CLG must file the following documents with the company’s registrar — 

• Annual confirmation statements 
• Annual accounts
• Report company changes 
• Accounts and company tax returns for HMRC
• VAT Returns, PAYE reports, and Self Assessment tax returns (as relevant)

The company must also maintain a register of members and a register of Persons With Significant Control. 

Read also: Your HMRC UTR Number Explained

Suitability

A charity company is suitable for individuals or entities seeking to implement projects or programs that benefit the public or a target population.

Difference between a Private Company Limited by Shares and a Company Limited by Guarantee

One of the key differences between a private LTD and a guarantee company is how the two legal structures treat profits. In a limited company, shareholders can opt to distribute profits to its members as dividends or reinvest them back into the company. 

But, a company limited by guarantee is by nature a not-for-profit entity and the guarantors can only reinvest profits back into the business to finance their objectives but not withdraw as profits.

Yet, with the above differences, the two structures have the following similarities — 

• Offer limited liability protection to the owners in case of insolvency. They will only be responsible for paying company debts up to the value of shares or guarantee.
• Registered and some of their pertinent details such as registered address, director information, shareholder and guarantor details, and filings are available in the companies register for public scrutiny. 
• Are required to have one director, secretary (for public limited companies though optional for ltds and CLGs) and members (who act as shareholders and guarantors.)
• Established by a memorandum of association, signed by all the initial subscribers agreeing to start the business, and the articles outlining rights, responsibilities, and how the business will manage its operations. 
• Require registered office address, director service address, and company name found to be available by searching the register.
• Have similar routes for dissolution, which can either be by voluntary strike-off, Members' Voluntary Liquidation (MVL) (for solvent companies), Creditors' Voluntary Liquidation (CVL) and compulsory Liquidation (for insolvent businesses).  

For the most part, the same rules and regulations apply to companies limited by guarantee as to companies with a share capital.

See also: The Difference Between a Voluntary and Compulsory Strike Off

What is the process of forming a company limited by Guarantee?

Registering a company limited by guarantee requires the following — 

• A company name: Use the uk company public register of companies to find the available and suitable name for your venture. 
• Registered office and director service address for directors, shareholders and guarantors. 
• Determine your SIC code aligned to the intended activities of your venture
• A limited company by guarantee must have at least one director and guarantor. 
• Statement of guarantee indicating the circumstances during which each subscriber will pay the typically £1 nominal guarantee amount. 

Can guarantors take a share of the profits?

No. Guarantors cannot take out a share of profits because the business structure is designed for non-profit ventures. In case there is surplus income, the entity is expected to reinvest the surplus back into the business. If the members ever decide to take out profits, the company will no longer be considered non-profit and will not be able to apply for charity status. 

What is the difference between a shareholder and a guarantor?

What sets apart a shareholder from a guarantor is their role and expectations within different types of companies. Shareholders are associated with limited companies, whereas guarantors are found in companies limited by guarantee.

Shareholders hold ownership in LTDs and anticipate receiving dividends as returns on their investments. They have a stake in the profits and losses of the company based on the number of shares they hold.

On the flip side, guarantors are connected to companies limited by guarantee. Guarantors are not typically interested in profit-sharing or dividend distributions like shareholders; instead, they serve as a financial backup in case of financial difficulties for the company.

Why set up a limited company by guarantee?

Some of the reasons why members may opt to set up as a CLG include — 

• Personal liability protection — By forming a CLG, the liability of the company’s members is limited to the amount they agree to guarantee in the event of insolvency, protecting personal assets from being used to settle company obligations.
• To pursue objectives that benefit society — The enterprise is able to operate as a legal unit while focusing on its core objectives without the pressure of maximizing profits for shareholders.
• Credibility — Being registered as a limited company can enhance the credibility and reputation of the organisation. It signifies a formal and transparent structure, which can be appealing to stakeholders, donors, and partners.
• Perpetual succession — It offers perpetual succession, meaning it can continue its existence regardless of changes in membership, a feature crucial for organizations with long-term goals and commitments.

Can a Company Limited by Guarantee Lose Its Charitable Status?

Technically, a CLG does not have charitable status, since it's only acquired after the non-profit is incorporated by the Charity Commission and transforms into a charity company. However, it may lose its right to incorporate into a charity if — 

• Members take out surplus profits as personal income;
• If profits are distributed to members as a form of dividend payment.

If the company has already incorporated into a charity, it will lose its status if it takes any of the above actions or fails to — 

• Adhere to its governing documents particularly pursuing its objectives.
• Comply with regulatory requirements such as filing confirmation statements and reports to the commission or the registrar of companies. 

Can guarantors take a share as evidence of ownership?

No. A company limited by guarantee must not and cannot issue shares. The guarantors' evidence of ownership is found in the statement of guarantee, where they pledge to provide a nominal amount in case of insolvency. 

The company’s memorandum of association that lists the subscriber agreement to form the venture also serves as proof of ownership. However, there is no stake given in terms of shares. 

Is an article of association relevant to the formation of a not-for-profit company?

Yes, it is a compulsory governing document for uk non-profit company. It documents how the subscribers intend to manage the enterprise. It contains the following information —

• Directors powers, responsibility and scope for decision making;
• Process of obtaining membership and resigning
• Meetings
• Voting procedures
• Administrative arrangements

See also: Memorandum and articles of association 101

Guarantee companies vs companies with share capital

A CLG is like an ordinary private company limited by shares. However, unlike LTDs, a non-profit has no shares or shareholders and reinvests surplus income to enable the company to run its day-to-day activities. Yet, both entities are required by law to file accounts at the Companies Registration Office and submit annual returns. The CLG is set up for certain objects for the benefit of its members while an LTD is established primarily for profit-making purposes and to provide returns to its shareholders.

Can limited by guarantee companies have persons with significant control?

Yes. A CLG can have PSCs who exercise ultimate control over the company. Despite the unique structure of CLGs without shareholders or capital in the traditional sense, individuals within the organization can still qualify as PSCs if they meet the criteria outlined in the Companies Act 2006. 

An individual or company who fulfils one or more of the following conditions qualifies as a PSC - 

• Directly or indirectly holds more than 25% of the voting rights.
• Directly or indirectly holds the right to appoint or remove a majority of directors.
• Otherwise has the right to exercise significant influence and control.

Company name requirements for guarantee companies

CLG naming requirements are the same as the business name requirements for private limited companies. Your CLG name must not — 

• Be too similar or identical to an existing corporation name;
• Imply any connection with the UK government, local authority or any agency;
• Include sensitive words like “Charity” without the appropriate permission;
• Be offensive, inappropriate or likely to cause harm; and
• Suggest criminal activity or be contrary to public interest.

What is the difference between a Charitable Incorporated Organisation (CIO), a Community Interest Company (CIC) and a Company Limited by Guarantee (CLG)?

The main difference between a CIO and a CIC lies in their legal structure and statutory oversight as explained in the table below.

What is the post code in the UK?

A postcode in the UK is a 5 to 7-character alphanumeric code used in the mail delivery system. Each full postcode identifies a specific area, which can include multiple addresses or even a single delivery point. 

What is the UK postcode format?

A United Kingdom postal code is a two-part alphanumeric code (consisting of letters and numbers) used to identify specific locations for mail delivery. It typically contains 5 to 7 characters, each serving a distinct purpose. 

The two parts of the code are - 

• The Outward Code, or outcode, is the first part of the postcode and is 2 to 4 characters long. It always begins with a letter and may end with either a letter or a number.
• Inward Code, or incode, the second part of the postcode, follows a space always 3 characters long. It begins with a number and is used to pinpoint a more specific location within the outward code area.

The outward and inward codes are divided into six main components, each defining a specific level of mail delivery. Progressing from the outward code to the inward code narrows the focus, identifying increasingly precise delivery locations.

The main components of the codes include — 

1. Postcode Area

The first one or two letters of the outward code represent a postcode area, often an abbreviation of the main city or region, for example:

2. District Code

The district code typically comprises the first two to four characters of a postcode. For example, in L1, "L" identifies the postcode area as Liverpool, while "1" is the district code. This outward code, L1, encompasses a range of addresses and locations within central Liverpool, including shopping districts and public buildings.

Sometimes, the district code excludes a trailing letter to cover a broader mail delivery and sorting area. However, in other instances, the trailing letter is included to provide a more refined level of detail. This flexibility ensures efficient sorting and accuracy in mail delivery across different regions.

3. Sub-District Code

Sub-district codes are only used in high-density areas like parts of London, where more detail is needed due to population size or mail volume.

• They refine locations within a district and are included in the outward code when necessary.

4. Postcode sector

The sector is formed by combining:

• The postcode district (first part of the outward code).
• The space after the outward code.
• The first number of the inward code.

For example, in L1 8, the sector includes the district code "L1" and the first number of the inward code "8."

5. Unit or Delivery point code

The postcode unit is the final part of a postcode, consisting of the last two letters. This component provides precise location details. Each postcode unit typically represents:

• A street or part of a street
• A single address or a group of properties
• A single property or a subsection of the property
• An individual organisation (e.g., the Driver and Vehicle Licensing Agency)
• A subsection of an organisation

The level of precision within a postcode unit often depends on the volume of mail received by the premises or business. This ensures accurate sorting and delivery to even the most specific locations.

Examples of the postal code patterns include — 

See also: Address Line 1 And Address Line 2: Examples & Applications

What Is a US Zipcode?

A ZIP Code, the US equivalent of a postcode, is a 5-digit code used in the United States mail delivery system. It is designed to identify specific geographic areas to ensure accurate and efficient mail delivery.

How can you differentiate between the UK and US zip codes?

The UK does not use zip codes; instead, it uses postcodes. Both post and zip codes are vital for efficient mail delivery, but they vary significantly in length, format, structure, and specificity. 

See the table below:

How can I find my zip code or postcode in the UK?

Use the Royal Mail's Postcode Finder tool to lookup a UK code. This online service allows you to look up an address or part of it, and it will automatically populate the matching postcode for your location.

What is the UK's postal code? 

A UK postal code consists of 5 to 7 alphanumeric characters, divided into two parts: the outward code and the inward code, separated by a space. It serves as a geographical identifier to pinpoint specific locations for mail delivery. This structured format ensures accurate and efficient sorting and delivery across the UK.

How do sector and delivery point codes work within the UK postcode system?

Within the UK postcode system, sector codes and delivery point codes play essential roles in narrowing down locations for precise mail sorting and delivery:

• Sector: This combines the district code (part of the outward code) and the first digit of the inward code (e.g., SW1A 1 or E1W 3). It identifies a more specific area within the district, such as a neighbourhood or street cluster.
• Delivery Point Code (Unit): The final two characters of the inward code (e.g., AA or TD) represent the delivery point. This pinpoints an exact address, property, or group of properties, such as a single house, office, or organisation.

For example:

• Postcode SW1A 1AA:some text
  • Sector: SW1A 1 (narrow area within Central London).
  • Delivery Point (Unit): AA (specific building, such as 10 Downing Street).
• Postcode E1W 3TD:some text
  • Sector: E1W 3 (refined area in East London).
  • Delivery Point (Unit): TD (specific property or group of addresses).

This structure ensures a systematic approach to pinpointing delivery locations, enhancing efficiency in the UK postal system.

Infographic: UK Zip Code Explained

How does a limited liability structure work? 

Limited liability is a legal structure established by the Companies Act companies use to protect shareholders from personal responsibility for a company’s debts and obligations. The company is solely responsible for fulfilling its financial commitments in limited liability business structures.

If the company cannot meet its debts, shareholders only risk losing their investment in the business while their personal assets remain safeguarded. This separation of personal and business liability offers vital protection for entrepreneurs, encouraging them to invest and grow their ventures with reduced financial risk.

What are the disadvantages of limited liability?

While limited liability offers many benefits, it also comes with some disadvantages compared to a sole trader business:

• Increased compliance requirements: To prevent abuse of limited liability protection, businesses must meet obligations like filing confirmation statements and annual accounts, ensuring accountability.
• Minimal privacy: Company financials and filing histories are publicly accessible, promoting transparency as a trade-off for limited liability.
• Extensive formation requirements: Registering a limited company involves meeting several criteria, such as providing a registered office address and a director's service address, verifying identity, and submitting a memorandum and articles of association.

These factors add complexity and responsibility for limited liability businesses.

What does unlimited liability mean?

Unlimited liability means there is no legal separation between the business and its owner. This means that if the business becomes insolvent or is sued, the owner is personally responsible for all the debts and obligations. If the venture cannot meet any of its obligations, creditors can pursue the owner's personal assets to recover what is owed. This structure poses a significant financial risk to the business owner.

What is a private company limited by shares (LTD)?

An LTD is a standard business structure in the UK in which shareholders enjoy limited liability, restricted to the amount they invest in the company, in case of insolvency. Due to its flexibility and protection, this structure is popular among small businesses and startups. 

Key features include:

• Limited liability protection shields shareholders' personal assets from business debts.
• Separate legal entity ensures the company operates independently of the business owner or owners.
• Shareholders can also serve as directors, allowing individuals to retain full control of the business.
• Nominal share capital makes it accessible for small businesses to set up with minimal financial outlay.

An LTD provides a balance of financial liability protection and operational flexibility, making it a preferred choice for entrepreneurs aiming to safeguard their personal assets while growing their businesses.

Find out more: What is the difference between ltd and limited in a company name?

What is a public limited company (PLC)?

A public limited company (PLC) is similar to a private limited company, with its shares being publicly traded on the London Stock Exchange, allowing the company to raise capital from the public. Key characteristics include:

• Limited liability protection means shareholders are only liable for their investments.
• Separate legal entity, providing the company with legal independence from its shareholders.
• It requires a minimum of two shareholders, one director, and a company secretary, ensuring a balance of oversight and management.
• Must have a minimum share capital of £50,000, of which at least 25% must be paid before trading begins.

A PLC provides opportunities for growth and increased public confidence but requires strict regulatory compliance and transparency.

What is a limited liability partnership (LLP)?

A limited liability partnership (LLP) is a legal structure where at least two individuals form a partnership. The LLP provides limited liability protection, meaning partners are not personally responsible for business debts beyond their contributions. 

However, it is a pass-through entity for tax purposes, so partners pay taxes individually, even though the LLP itself must file returns. This structure offers flexibility, as partners can manage the business directly without the need for directors or shareholders. 

LLPs have similar formation requirements to private limited companies, including a registered office address and registered email address. For smooth operations, it is strongly recommended that a partnership agreement be established to outline roles, responsibilities, and profit-sharing arrangements.

What is a company limited by guarantee (CLG)?

A company limited by guarantee (CLG) is a structure designed for non-profit ventures, such as clubs, charities, and community organisations. The owners, called guarantors, limit their liability for the company’s debts to a nominal guaranteed amount, usually £1 or another minimal sum.

Unlike companies with shareholders, CLGs do not distribute profits; all income is reinvested into achieving their objectives. Any surplus assets must be transferred to a similar non-profit organisation upon dissolution and cannot be distributed to the guarantors. 

Key features include:

• Limited liability protection ensures guarantors are not personally liable beyond their guaranteed amount.
• Separate legal entity, giving the organisation a distinct legal identity.
• Guarantors instead of shareholders, reflecting its non-profit focus.
• Requires at least one director to oversee its management.
• Nominal share capital reflects its focus on non-commercial purposes.

What are the advantages and disadvantages of limited liability companies?

Limited liability companies come with many benefits but also a few challenges. Here’s what you need to consider:

Advantages

• Personal assets are protected as liability is limited to the value of shares.
• A registered company adds professionalism and credibility.
• Access to tax reliefs and allowances otherwise not available to sole traders.
• Operates as a separate legal entity, allowing it to own property and enter contracts.
• It is easier to attract investors or raise capital by issuing shares.

Disadvantages

• Registration with Companies House involves additional costs.
• Stricter compliance requirements with transparency and regulation obligations.
• Administrative tasks include maintaining a registered office and filing tax returns and annual accounts.
• Extracting profits is more complex, with strict rules separating business and personal finances.
• Engaging professional accountants is often necessary, increasing operational costs.

This structure is ideal for businesses needing liability protection and credibility but requires careful management of its responsibilities.

What are the forms of limited liability business structures?

There are five common types of limited liability business structures:

• Company Limited by Shares: Owned by shareholders, with liability limited to the value of their shares.
• Public Limited Company (PLC): A company that can trade shares publicly on the stock market, with liability limited to shareholder investments.
• Company Limited by Guarantee: Typically used by non-profit organisations, personal liability is limited to a pre-agreed amount each member guarantees.
• Limited Liability Partnership (LLP): A partnership where members have limited liability and share profits based on their agreement.
• Limited Partnership (LP): A structure with at least one general partner with unlimited liability and one or more limited partners with liability restricted to their investment.

Each structure offers unique advantages and is suited to different business needs.

Limited liability protection explained.

Limited liability protection is a legal concept in company registration that separates the business from its founders in the eyes of the law. This means the founders are not personally responsible for the company’s legal or financial obligations beyond their invested amount. In other words, their personal assets are protected from business liabilities.

To establish this legal separation and secure limited liability protection, a business must:

• Formal registration with a unique name and address
• A defined ownership structure with shareholders or members, with liability limited to their investments 
• Articles of association and a partnership agreement 
• Separate financial accounts 
• Compliance with obligations specified in their respective laws on issues of filing and tax

This ensures the business operates as a separate legal entity, safeguarding the personal assets of its founders.

What is the main characteristic of an LLP according to the Limited Liability Partnership Act of 2000? 

The defining characteristic of a Limited Liability Partnership (LLP) is the liability protection it offers to its members. Members are shielded from personal responsibility for the partnership's debts and obligations, with their liability typically limited to their investment in the LLP. However, all members may still be liable for the wrongful acts of another partner if those acts were performed within the scope of the partnership.

See also: What does limited liability mean?

What are the benefits of an LLP? 

An LLP offers unique features that set it apart from other business structures. It provides flexibility, protection, and confidentiality for its members. 

Below is an overview of its most notable benefits: 

1. Separate legal entity — A key characteristic of an llp and an offshoot of the limited liability principle is that an LLP is a separate legal entity from its owners. This means the LLP has its legal identity and can enter into agreements, own property, and conduct business in its name. This separation protects the personal assets of its members, as the LLP itself is responsible for its obligations and liabilities.
2. Appointment of a designated partner - During the formation of an LLP, the partners must appoint at least one designated partner responsible for critical administrative and compliance tasks, such as:some text
   • Preparing and filing confirmation statements and annual accounts.
   • Reporting changes, such as a change of address, to Companies House.
   • Appointing an accountant or auditor as required.
   • Overseeing the statutory compliance of the partnership and its members.
3. Tax principle - An LLP operates as a pass-through entity for taxation purposes. This means that the LLP itself does not pay tax on its profits. Instead, the profits are "passed through" to the individual members, who are taxed on their share of the profits. Each member must file a self-assessment tax return to report their income.
   In addition to the members' tax obligations, the LLP must file an annual partnership tax return through the self-assessment system to declare the overall profits and distribute them among the members.
4. ‍Profit distribution - The partnership deed governs how members distribute profits in an LLP. Unlike in a limited company (Ltd), where profits must typically be distributed according to shareholding percentages, an LLP allows for greater flexibility. Profit distribution can combine fixed shares and discretionary amounts, enabling members to agree on arrangements that best suit the partnership's needs and contributions.
5. ‍Confidentiality — An LLP allows professionals to maintain confidentiality regarding partnership arrangements and profit distribution. Unlike an LTD, whose articles of association are publicly accessible on the Companies House register, the terms of an LLP's partnership deed remain private.

See also: What is the difference between ltd and limited in a company name?

What are the disadvantages of an LLP?

While an LLP offers many benefits, it has certain drawbacks, particularly regarding reporting, disclosure, and taxation.

1. Complex reporting requirements - Due to its limited liability status, an LLP has reporting obligations similar to those of a limited company. These include:
   • Maintaining a registered office address.
   • Keeping a statutory register, including details of persons with significant control (PSCs).
   • Filing annual confirmation statements.
   • Reporting changes to Companies House, such as member details or address updates.
     These administrative responsibilities can be time-consuming and require additional resources to manage effectively.
2. Disclosure requirements - An LLP must disclose specific information publicly, which can disadvantage those prioritising privacy. This includes:
   • Names, month and year of birth, and service addresses of members.
   • Details of persons with significant control (PSCs).
     This lack of complete confidentiality can deter professionals who wish to keep their business arrangements private.
3. Taxation of profits - Profits in an LLP are taxed in the year they are earned, irrespective of whether they are distributed to members or retained within the business. Additionally, LLP members are subject to National Insurance Contributions (NICs) on their income.
   This taxation structure makes LLPs less tax-efficient than limited companies, where profits are taxed only when extracted (e.g., through salaries or dividends). This difference can result in a higher overall tax burden for some businesses for LLP members.

Read more: Register Your Company and Get a Certificate of Incorporation

What is the role of an LLP partner? 

The role of an LLP partner is typically defined in a partnership agreement and encompasses responsibilities that often mirror those of a company director, particularly in statutory compliance. Partners are collectively responsible for the business's effective management and strategic direction. 

Their primary responsibilities include:

• Overseeing the business's daily operations to ensure smooth functioning and alignment with its objectives.
• Setting the overall direction of the business by defining goals, formulating procedures, and driving long-term growth strategies.
• Ensuring compliance with all legal and regulatory requirements, such as timely filings, accurate record-keeping, and adherence to self-assessment tax deadlines.
• Acting in the best interests of the business, its clients, and other partners, maintaining trust and fostering collaboration.
• Overseeing financial matters, including the distribution of profits and losses, while ensuring the business's financial stability.

An LLP partner’s role requires a balance of operational management, strategic leadership, and a commitment to the partnership’s legal and financial obligations.

What are the tax advantages of an LLP? 

LLPs offer several tax advantages compared to limited companies, making them an attractive business structure for many professionals and entrepreneurs. Key benefits include:

• An LLP is a pass-through entity, meaning the tax obligations are passed directly to the partners. Partners are taxed on their share of the profits at personal income tax rates, avoiding the double taxation faced by limited companies, where the company pays corporation tax and directors pay dividend tax.
• Income tax brackets can often be lower than corporation tax rates, providing additional tax efficiency for many LLP members.
• LLPs allow profits to be distributed flexibly, reflecting each partner's contributions, skills, and other merits. This flexibility is unlike limited companies, where profit distribution is typically tied to shareholding percentages.
• LLP partners are not subject to benefits-in-kind taxes, often applicable to directors of limited companies for perks like company cars or private health insurance.

These tax advantages make LLPs an appealing option for businesses seeking flexibility in profit distribution and more streamlined tax obligations.

Do LLP partners pay tax?

Yes, LLP partners must pay tax and National Insurance Contributions (NICs) through the self-assessment system. Partners are taxed on their share of the LLP’s profits, and they must ensure they meet the self-assessment deadlines set by HMRC for notifying liability and settling their tax bills.

What are the advantages of forming an LLP over a traditional partnership, limited partnership or private limited company?

An LLP offers a unique structure that differentiates it from traditional partnerships, limited partnerships, and private limited companies. These differences provide advantages, including greater flexibility, liability protection, and tax benefits.

See also: Company Limited by Guarantee

What are the differences between LLPs and limited companies?

While LLPs and limited companies (LTDs) offer limited liability protection, they differ significantly in structure, reporting obligations, taxation, and profit distribution. The table below highlights the key differences.