Startup Company Formation: This discussion takes you through the basics of company formation as a startup. Items under discussion include, website, email address, paperwork, formation of directors, share agreements, etc. This post discusses some of the services available to ease this process for a startup.
Things to do during a startup company formation
Setting up a new company as a startup entrepreneur is hard. Thankfully, you can benefit from a few free resources to help form your company. I like the support available during bootstrapping phases. One of the most helpful ones is joining a startup accelerator that can help you find resources. You can read more about what startup accelerators do here.
We will talk about access to resources such as lawyers, accountants, etc that can help you legally start your business. Before this, make sure you think about the structure – whether you will be a partnership, Limited liability company etc. This helps conversations during fundraising, investor discussions etc. Below is a list of common requirements before a startup company formation.
- Company Name and structure
- Trademarks and Logo
- Share Agreements
- Address proof
- Legal paperwork of setting up company
- Accounts and taxation
- Creating a business bank account
Company Name, Logo and Website
During a startup company formation, think about your online presence. Some popular product practices include smoke test etc which will help you gauge customer interest. Investors love data, even the number of website visitors sometimes can indicate interest level in your product.
Think about your website name, logo and colours. If you choose a website service provider such as WordPress etc, these services are fairly easy to find. You can easily create a landing page and create a digital presence. Don’t spend too much time on this though – it is only a placeholder.
Make sure you check for the following:
- See if there are any trademarks for the company name you’re choosing
- Check for website availability
- Use a no code/low code website creation service such as wordpress
- Create a simple basic logo – services such as Canva provide some free packages to help
Email Address and contact details
Think about the best ways people can reach you. Try to separate your personal email address and phone number from official ones. Gmail services offer free email ID creation. Business ID creations are fairly straightforward at a small cost. It gives you access to suite of gmail services such as slides, google sheets etc.
Company Formation Services
A simple google search will give you information about company formation services. They offer a small trial offer for under $50. This package will include company registration, initial shareholding and all basic services. Some of them even offer a registered address making it easier for you.
If it is in your budget, I’d highly recommend considering company formation services for a startup. They usually have connections into accountants as well who can help setup your business and file taxes. This provides a presence for your startup.
Bank Accounts for startup
Bank accounts used to be tricky. Its certainly gotten easier now with new services that offer bank accounts in a day. Look out for such services, particularly if you are a business expecting income in early stages.
Some examples of this include Tide Banking, Acorn business account, cash plus etc. Most of these banks are online only and perform a soft credit check which enables them to provide you with an account quicker. The larger banks certainly take a little more time for their services to be activated. A possible strategy can be to use the online banks for the time being until you get the standard banking services activated.
Accountancy Services for startup company formation
These services can get expensive depending on the type of service your business requires. Many accountancy firms are tuned towards scale-ups and large businesses which makes it a bit difficult for a startup to run your payroll, tax returns, etc. But, you do have some services which make use of the benefit of cloud-based services such as Xero, QuickBooks etc.
The company formation services usually introduce you to a few accountants they have contacts with. But, it is worth doing your research and talking to these accountants. Some of these costs can range up to £2,000 for a startup while some others can provide your basic services for a smaller fraction of this price. It is recommended to venture out to find some services which can aid you best. Through this you will be able to get some services which can offer basic accountancy requirements for £40-50 per month.
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You are right about difficulties one may face starting a company. Most of the entrepreneurs are excited to see their idea work. If they have to worry about additional issues like finding a name, creating an account, taxation issues etc, it will take their mind away from the essential part of business. Most idea generators are pretty naive about other material issues. Thank you for sharing the post.
Thanks Abhijit, nice to hear from you. Having been through two startups, these have been an area of pain for me. One of the benefits was that I saved some costs, but the time taken in this process was enormous. This time would have been better spent on the business and let the experts do what they are good at – esp when there are some service providers out there who are affordable..