Company Formations - Why cheap may not always mean cheerful

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Amy Rees If you key the words “company formations” into Google, a large number of results are displayed, with some companies boasting of cheap company formations packages, often under £50.

The small print of such formation agents can state that the fee advertised is exclusive of VAT, Companies House, & any other professional fees, so that £50 formation is now probably closer to £70. Many providers offer different levels of services; you may not be getting much for your basic “£50” fee.

Mistakes can be made, articles of association can be poorly drafted, and in the long run, that cheap formation you purchased could end up costing you more than you had bargained for.

Formation agents normally do not provide advice on whether the chosen structure of the company is appropriate for the use intended; they simply form the company you advise them of and do not ensure it is completely suitable for your needs. Most formation agents do not tend to offer a bespoke service tailored to the client’s needs, and keep their charges low by assuming one size will fit all.

Perhaps worryingly, company formation agents are not required to be regulated, and in some instances may not be qualified or experienced in company law and company formations. We are experienced in company formations, and as we are a full service legal firm, we can also advise on related issues, such as employment contracts or Wills.

At TWM Solicitors we are completely transparent about fees relating to company formations. Our standard charge is £250 plus VAT. This fee includes the Companies House fee, and for this service you get peace of mind that a law firm is dealing with your company formation, in a professional manner and ensuring that obligations as to formation itself are being complied with. This fee also includes all the extras you would expect; statutory registers written up (electronic and/or hard copy), hard copy company books, first board minutes, and either model articles, or bespoke articles of association (for property management/residents companies only).

We can also act as company secretary to remove the burden of day to day filing and statutory obligations from the company directors (though, note that directors themselves are still responsible for ensuring that statutory obligations are complied with, and filings made), as well as acting as registered office, for an annual fee. As TWM Solicitors is a Surrey-based firm, we are able to offer a service on a par with that offered by London firms, but without the London price tag.

If you would like to have an informal discussion with a member of our formations team, please call Amy Rees on 01483 752757 or email