There are several types of addresses associated with limited company formation, some are legally required and others are optional.
The most important ones are the registered office and service address, both of which Companies House request during the incorporation process. Directors must also provide their residential address, but this information will remain private unless a home address is used for registered office or service address purposes.
Regarding optional company addresses: you may use a SAIL address (explained below), a business address and a trading address. They all sound like ‘much of a muchness’, but they serve very different purposes.
This is the official ‘headquarters’ of a limited company. Details are placed on public record and are primarily used to receive mail from Companies House and HMRC, as well as being the required inspection location for statutory company records.
Any type of physical postal address can be used, with the exception of PO Box numbers, as long as the address is located in the same jurisdiction in which the company has been incorporated (England/Wales, Scotland or Northern Ireland).
Residential addresses are permitted but, due to public disclosure of this information, non-residential addresses are more suitable in terms of privacy and professionalism.
This is the official contact address for company directors, to where their statutory mail is delivered. It can be any physical postal address in the UK or overseas. Residential addresses can be used but, again, this information will be available to anyone with access to a computer and internet connection.
A SAIL (single alternative inspection location) address is an optional address where a company can keep some or all of its statutory records for inspection purposes. This can be ideal if your registered office is not conveniently placed for inspection purposes or you use your home address as a registered office and you don’t want strangers coming into your house. It’s usually just HMRC that asks to inspect company records but, nevertheless, some of us are a bit funny like that.
This is a professional contact address that you can give to clients, suppliers, service providers, banks and other contacts. You can use any address you like, in fact, you can have multiple business addresses if you want to establish and grow your business in different parts of the UK or overseas. Unlike a registered office, a business address doesn’t have to geographically restrict your company to one place.
This is exactly what you think it is – the place where your main business activities are conducted. It’s also where most businesses keep their stock, equipment and assets. There is no need to disclose this address to anyone, unless it is the same as one of the aforementioned company addresses.
This is a question that would-be entrepreneurs need to ask themselves. It is not enough to have a good idea – or even a great idea – for a product or service. What you need to find out is whether you can provide that service or product to enough people who will pay enough so that you make enough profit.
So where do you start? The first thing is to research is what is out there already. If the market is saturated with competitors providing the same goods or services as you, then your business must have a pretty compelling USP (unique selling proposition) to make it stand out.
Check out the competition
How are your competitors doing? Companies must file their accounts at Companies House, and companies listed on the London Stock Exchange will have to provide detailed financial information to the public, which means that you can find out quite a lot about them after a few clicks on the internet.
The next thing to do is firm up the scale of your potential customer base and how much they would be prepared to pay. The best people to tell you about this are strangers (friends and family might fib to protect your feelings). If you need the results of the research for attracting funding, it can be worth paying professional market researchers who will present impartial findings in a clear way. If you end up doing the research yourself, strive for professional looking results. Common research methods include questionnaire and interviews with interested parties.
Conduct a realistic appraisal of costs
Think through every penny you need to spend to sell your goods or services, and make a note of them. Have you counted business premises, transport costs and tax implications? If you are making a product it is easy to focus on components and blank out these other issues which still have a bearing on whether your business can be profitable.
Think about business models
Finally, think about the structure of your business and whom you will be working with. If you lack certain skills, should you consider going into a partnership with someone who can make up that deficit? Or should you be considering setting up a limited company? Setting up a company can only take a couple of hours with a formation agent, and mitigates the risk in case your business turns out not to be viable.