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Forum - Reserving ltd company name for future use - is it a bad idea

Reserving ltd company name for future use - is it a bad idea

Fri, 20/08/2010 - 21:09 — bestager

Hi,
I am a new service business and currently a sole trader. I intend to change to a limited company in a few months time, once business starts coming in. I want to protect my current business name until I am ready to become a limited company and hence thinking of reserving the name by using a reservation service offered by a formations agent. There are several on a simple google search - just for reference such as;
http://www.duport.co.uk/company-formation/reserve_name.php
http://www.companiesmadesimple.com/reserve-a-company-formation-name.html

From what I understand, the formations agent will register the company in their name as a dormant company and transfer the company to your name on paying an additional fee.
However, I have been advised by an accountant not to go down that route as it has tax implications and practical problems when it comes to opening bank accounts and that in his experience individuals who used such a service have had to close those companies and register afresh due to the footprints of the formation agents in the company history complicating things. is that true. Does anyone have any experience/advice?

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philjones's picture

A simpler option would be to purchase the company at this stage. The cost should be little more than the cost of a reservation fee and will ensure that the correct details are held at companies house from the outset. Until you are ready to use the company then the company would remain dormant and the cost of running a dormant company should be minimal.

Mon, 23/08/2010 - 12:52 — philjones

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