5 Costly Business Registration Mistakes Small Business Owners Must Avoid

There are more Brits starting businesses than ever before, and I’ve helped thousands of entrepreneurs navigate company formation, Companies House compliance, and the practical realities of starting and growing a business.

One thing I see repeatedly is that small business owners often make the same mistakes when it comes to understanding how to register their business correctly and keep on top of this. It’s not always easy to get your head around everything needed, but this isn’t just about extra paperwork; errors made in this field can be costly and can leave business owners having to fork out thousands. Here are the mistakes to be on alert for…

1. Late Annual Accounts 

One of the most common mistakes is treating Companies House filing deadlines as administrative formalities rather than legal obligations. 

Annual accounts are extremely important documents that you must file promptly and the fine starts the minute you’re over the deadline. A fine starts at £150 but can go up to thousands the later you are.

If you think you’ll struggle to complete your own annual accounts, seek the services of a reputable accountant in order to avoid the potential repercussions of incorrect annual accounts filing and the fines involved.

2. Not filing a confirmation statement if nothing has changed.

Some directors assume they don't need to file a confirmation statement if nothing has changed. It’s an understandable assumption, but it isn't the case. In fact, filing your confirmation statement late is actually a criminal offence. 

The annual CS01 is a legal requirement that confirms your company information in the public record is correct and applies to every limited company in the UK, including dormant companies. Recent changes require you to declare a lawful purpose and verify your director's identity before you can file. Failing to file your confirmation statement on time is a criminal offence.

The authorities can prosecute the company and its officers, including directors and secretaries. Conviction can lead to an unlimited fine and a criminal record for the individuals responsible.

Companies House will also begin the strike-off process for persistent failure to file. The strike-off process involves issuing warnings before Companies House publishes a notice in The Gazette to dissolve the company. If Companies House strikes off your company, banks will freeze its accounts, and its assets will pass to the Crown.

3. Forgetting paperwork for ‘dormant’ companies  

Not trading doesn’t mean your paperwork obligations vanish.

Many business owners forget that a dormant company still requires ongoing attention, even if it’s not making you money.

If the company is dormant for Corporation Tax purposes, HMRC should be informed through the appropriate process. If you are using one to protect a future business name, you need to maintain its statutory obligations until you are ready to trade.

Companies House and HMRC treat "dormant" differently, which can confuse people. If a company is dormant for Corporation Tax purposes, the company may need to tell HMRC that it is dormant. This is separate from the company's obligation to continue filing the appropriate information with Companies House. The process can be completed online through GOV.UK. Founders should have their company details and Unique Taxpayer Reference available when completing the process. Do not assume that making a company dormant at Companies House automatically deals with its Corporation Tax obligations. They’re two different things!

4. Using an unsuitable registered office address

Every UK-registered company needs a registered office address where official correspondence can be delivered. This sounds simple, but problems arise when a company moves premises, loses permission to use an address, or fails to monitor post sent there.

The registered office is important because Companies House, HMRC and other government bodies may use it to send formal correspondence. If important letters or notices are missed, the company can end up missing statutory deadlines without the directors realising it.

Make sure the company has a legitimate registered office address, that you have permission to use it, and that incoming correspondence is monitored consistently.

For companies registered in England and Wales, the address must be an appropriate physical address in the relevant jurisdiction; the same principle applies to companies registered in Scotland or Northern Ireland.

5. Ignoring Companies House correspondence

A surprisingly simple mistake can have serious consequences: not opening or responding to Companies House correspondence. A letter or email from Companies House may relate to a filing deadline, a rejected document, a company-register issue or a compliance requirement. Ignoring it can allow a relatively straightforward problem to become much harder to resolve.

Treat Companies House correspondence as time-sensitive. Make someone within the business responsible for monitoring the registered office and the company's online filing notifications.

6. Failing to update company information when circumstances change

Another common mistake is assuming that all changes can simply wait until the next confirmation statement. Any changes involving directors, persons with significant control, registered office details and other company information may trigger separate filing obligations.

The confirmation statement is a yearly check on the register; it is not a substitute for making required changes when they occur. Whenever something changes within the company, ask whether Companies House needs to be notified immediately rather than waiting for the next annual filing.

7. Underestimating the importance of Companies House identity verification

Companies House introduced new identity verification measures in 2025 to deter individuals from registering companies using false or obscure identities. Companies House requires identity verification for anyone operating, owning, or controlling a UK company. The requirement applies to newly registered companies at incorporation and existing companies within a 12-month transitional period. Key individuals and entities needing verification include company directors, anyone filing documents on behalf of the company, and persons with significant control

You can verify your identity directly with Companies House through the GOV UK login system.

About the Author

Robert Engeham is the Founder and CEO of Your Company Formations, one of the UK’s leading company formation and business support providers. Since launching the business in 2014, they have helped more than one million entrepreneurs and business owners navigate the process of starting and growing a company. A passionate advocate for entrepreneurship and small business success, Robert is a voice on company formation, business compliance, startup strategy, and the evolving UK business landscape.