Company formations: The arguments for getting involved
Following its opening statement supporting the motion, "This house believes accountants should get more involved with company formations" Jordans addresses the points raised in the reply from Formations Direct and from AccountingWEB members.
In putting forward the argument that accountants should get more involved with Company Formations Jordans acknowledges that cheaper alternatives are available, most notably from Companies House itself.
But the real test for both accountants and their clients is when they need a more complex company type or structure than the model articles can offer.
Accountants and agents should be looking to help companies grow profitably by equipping them with a company fit from the outset for the owners’ future expectations.
Based on Jordans’ years of experience in this field, we know we have the right expertise to do that, allowing accountants to enhance and prolong their relationships with clients, whilst expanding their fee income around company-related services.
We were pleased to see that several AccountingWEB members agreed with our outlook. Adamineden, himself a company agent, confirmed that company formations are a starting point to establish a relationship with potential clients and pick up on-going secretarial work.
In their opposing statement to the motion, Formations Direct pointed out that the commoditisation of formations brought about by Companies House put a new emphasis on price. We wouldn’t disagree, nor with many of the sentiments expressed about service quality and the potential to add value around company formations, which we share at Jordans.
One of the best points raised so far about this came from Ryedaleman, who commented: “We could have the same debate about what [accountants] charge for doing tax returns and whether companies do it themselves or outsource.”
Mike H amplified the point: “You often get what you pay for. There are many ‘online accountants’ offering cheap accounting, but it does not mean it is right for your business... A good accountant should save you and your business money.”
As with your own clients, the value Jordans can deliver is based on our familiarity with your business.
The stiffest challenge we faced so far in this company formations debate was from AccountingWEB’s Jennifer Adams. She pointed out that accountants have already become increasingly involved in company secretarial-type matters, as demonstrated by the number of questions in Any Answers on the subject. Her advice is that accountants should know their limitations and know where to go if stuck for an answer.
We would argue that the appetite of AccountingWEB members for more information about company formations, the model articles and related secretarial issues is a good thing. Knowing the options available, and their control and taxation implications, is an important part of providing a timely and appropriate service to your clients.
Jennifer commented that using a formations partner will “also be cheaper than consulting a specialist solicitor”.
Specialist solicitors play an integral part within the Jordans team. While they are not allowed to offer advice to clients, their work underpins the systems and procedures we use. They are able to flag up issues that may arise from a proposed set of articles and run regular seminars where they share these practical experiences with accountants.
The web makes it possible for practitioners to find information about company rules and regulations, and to form companies themselves, which is a great benefit. But it cannot replace the insights Jordans gains from working with hundreds of formations across a wide range of industries and jurisdictions.