Key Differences between a UK Formation Agent vs. UK Accountant
We have recently seen a sharp uptake in the number of clients who have already formed their UK company through a formation agent, who then ask for our support and expertise to finish the setup process for their UK company.
There are many reasons why an overseas company may use the services of a UK formation agent vs. UK accountant for the company setup. Here are three:
- Knowledge based, such as the company searching online for UK formation
- Browsing through the content of the formation agent’s website
- Time Factored – Form your company within X hours
The process we follow to form a client’s company may seem similar to a formation agent, however as UK accounting specialists our journey is very different. Our company’s are registered on-demand, and not taking an off the shelf company, then adjusting the name, shareholders etc.
Here is a brief introduction to our process and why you should considerer this carefully before deciding which route is right for you.
AML/KYC (Anti-money laundering /Know your client)
Whilst your UK setup or expansion will be an exciting and a motivational journey, there are a few more onerous tasks that must be carried out prior to your initial launch.
The anti-money laundering and know your client checks are particularly strict in the UK; this is somewhat underestimated by clients wrongly assuming they are the same as in their home territory.
As any professional accountants we are duty bound to ensure confirmation of our client’s identity prior to acting on their behalf.
From what we have seen with formation agents, they ask clients to provide this data and after the formation process has been complete.
When we take over a client’s interests in the UK where the company has been registered using a formation agent, we still need to undertake these same checks, and often to a more stringent level of detail. Our level of support can be more comprehensive, such as Company Secretary, or appointment to our client’s UK bank mandate.
Our clients have found this approach puts them in a strong position to concentrate on growing their UK business for the longer term.
While a website can provide you with an overview of detail, it can’t answer specific questions relating to a company’s objectives. The structure of a UK entity can be very specific depending on what the company is trying to achieve by setting up in the UK.
A formation agent may provide general advice relating to UK formation, but generally won’t get involved in specific questions such as Do I need a UK entity to setup a PAYE scheme? Depending on the growth objectives in the UK, you may or may not need to establish a UK entity.
Our article on UK Company Formation options gives further detail.
The small print of some formation agents will merely make an “introduction” to a banking partner in the UK, leaving you to complete the process yourself. We handle the application process on behalf of our clients in co-operation with the banking managers.
The devil, is always in the detail – find out more on setting up a UK bank account.
We pride ourselves on representing our client’s UK operations, and to a certain degree European business interests.
Our business is one of building relationships; taking the time to understand our client’s business objectives from the outset, through growth periods and longer-term support.
Forming your UK entity is more than a one-time transaction. The structure and setup are one of the most important decisions that must be made, which can impact your business in the future.
A formation agent wants the customer to complete the online ‘shopping-cart’ process and what other possible add-on’s you may need ultimately leading to your credit-card details. Granted, if you know what you’re doing with the online process and have all the right answers to hand such as Persons of Significant Control (PSC Register) data, then a formation agent may be an appropriate avenue to form your UK company.
Always a poignant subject. It costs a fraction of the price to register a UK company through a formation agent than it does through an accountant. That said, all the points considered above all cost a portion of time and money.
We pride ourselves on supporting our clients UK and European journey rather than a one-time transaction. It all comes back to objectives, what are you trying to achieve?
Do you need an “off-the shelf” company, or do you need an operation appropriately structured for your needs of growth and success?
We support our clients UK setup. For further information on how to setup your UK company, take a look at the different types of legal entity available here.