When starting a new business there are a whole range of business plan questions to consider. What will it be called? What services will it offer? Who is your competition? Who is your target market? What is your price point?
In amongst all of these considerations, new businesses with low start-up capital must also make one other important consideration: What will be their company’s registered address?
For new businesses who cannot afford to rent office space, or for businesses started from home that do not necessarily require separate office space, the easy answer is to use a director’s home address.
However, businesses and business directors could be leaving themselves vulnerable to serious implications by doing so. If you’re a newly formed business, here are a few things to consider before you fill in the registered office address box.
What is a company’s registered address?
Before we get started, it’s important to clarify what a company’s registered office is.
A company’s registered office address serves as the official address for the company or limited liability partnership where documentation and other correspondence can be sent. The address is registered with Companies House, and therefore also appears on all necessary paperwork.
As the address is officially registered with Companies House, it also becomes accessible to the public via the Companies House lookup portal.
Find out more about what purpose a company’s registered address serves in our guide: What is a Company’s Registered Address?
What are the implications of a registered company address?
The implications regarding using the wrong registered company address are predominantly to do with concerns around privacy and safety.
Whilst residential addresses can be, and are quite commonly, used as registered addresses they are then made public through Companies House. This potentially leads to a number of drawbacks, including:
- Safety Concerns
In the worst case scenario of a disgruntled client, creditor or supplier, there would be very little preventing the person from appearing at your home address. This could be particularly worrying if you felt unsafe.
- Privacy Concerns
Alternatively, clients could potentially arrive unannounced at all hours too, which may lead to repeated disturbances for both you and your neighbours.
On the other hand, your address is also openly available to advertisers and marketers who may add you to junk mailing lists in the event of securing some business.
- Professional Appearance
As the official registered address must be used on all kinds of official paperwork, including contracts and invoices, this could come across as unprofessional to potential clients. This could be more impactful if the image your business is presenting across its website and social media suggests that it is fully established in its own premises.
- Tenancy Agreement Disputes
If you are renting your property, your landlord may not agree to the use of a property being used as a commercial address. This could cause friction between you and your landlord, especially if you were to go ahead without receiving written permission. This could terminate your agreement, or potentially prevent the landlord from wanting to renew with you.
What registered company address should you use?
Although using a residential address has advantages, such as ease of correspondence and maintaining low start-up costs, over time the negatives can outweigh the positives.
It’s recommended therefore to use a separate registered company address from your home address if possible. If your company is not able to rent separate space, consider a virtual office address.
These addresses can be used in place of your residential address, and are still valid in the eyes of the law, for example on Companies House. The virtual office addresses will collect your mail and forward it onto your private address, and some will even allow you to open your mail virtually through an online application so that you can decipher what is worth forwarding and what isn’t.
This keeps your information private, your address safe, and gives you a more professional appearance to potential clients and investors.
At MachFast we make all aspects of your company formation easy. By using our app you can register your company and open a business bank account within minutes, without the need to fill in endless forms. To get started, download our app today.
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