Incorporating a new company for a client

Incorporating a new company for a client

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Dear Members, 

I have opened a new accounting practice. I have a new client. He has an additional accountant and appointed me for set up new additinal LTD company.
I have prepared the engagement letter and have received the IDs and proof of address. 
Questions below:
1. Shall I incorporate new company on Gov.uk (I have practice licence) using my firms credentials of companies and registered address is my address.
2. 64-8 From Gov.uk and get it signed from the client and only get myself authorised for the new incorporated company. 

Many thanks 
Financialworld 

 

 

Replies (9)

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DougScott
By Dougscott
02nd Jun 2024 17:37

If I understand you correctly I wouldn't. Register the company with the directors details and directors address. Remember if you act as a registered office for clients and are regulated for AML by HMRC you will have to pay an additional AML fee.

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Replying to Dougscott:
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By Financialworld
02nd Jun 2024 18:46

I have practice Licence.
1. I have IDs and address proof
2. Incorporation - What is the best approach register through my practice (my email+my address - I will do AML - Client is happy to pay for AML. I am authorised through accounting body for AML
3. My aim is to Grow the practice, hence alittle extra cautious not to make any mistakes
4. Shall I collect payment from Client over the phone while registering.

Thanks for your valuable input

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By FactChecker
02nd Jun 2024 18:09

Ignoring the mechanics for a minute, if I were in your (OP's) shoes I'd be asking myself a few questions first - such as:
- if new client already has an accountant (not clear whether this is solely for client as an individual and/or for client's other business/es), then why isn't it that accountant who is asked to undertake the relatively trivial task of incorporating a new company?
- given that potential red flag, are there any other issues (possibly of concern or maybe just in terms of complexity) that you've uncovered so far - i.e. when you say you "have received the IDs and proof of address", I presume/hope that's not the sum total of your AML checking?
- why does new client wish to use your address as company's registered address (and why are you prepared to consider providing it given the potential risks far outweigh the revenue from that service)?

And what does "only get myself authorised for the new incorporated company" mean?

Of course it may be that everything is wholly above board (one of the difficulties with a public forum is being unsure what info is omitted because it seems obvious to the person posting vs what that person simply didn't realise) ... but IF this is your first client, take time to think through what you do and don't know - and the implications thereof.

Thanks (2)
Replying to FactChecker:
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By Financialworld
02nd Jun 2024 18:57

Dear Fact Checker,

There are no issues for AML as I will run full AML check. I am only trying to make it smooth as do not want to get mixed with other accountants responsibility as it is a separated LTD company. And new company will be investment company. I hope I am on the right path.

For incorporation, I am going to do do the following after full AML:

1. Incorporate through Gov.uk
2. Registered address is my address or shall I keep my address as correspondence address
3. While on Gov.uk, make payment on phone with Client.

Thanks
Financialworld

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Replying to Financialworld:
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By FactChecker
02nd Jun 2024 20:05

I repeat the kernel of my previous response - more bluntly and for the final time - if you haven't done this before (or for whatever reason are not sure what you should do to achieve such a simple task) then DON'T DO IT!

[A bit off the wall, but if you're intent on 'learning by doing' then you'd be better to set up your own company and then later - when you've learned the ins and outs of it - close that company. That will cost you, but nothing like as much as it will if you make a mistake doing it for a client.]

As they say on the TV - I'm out.

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By johnthegood
03rd Jun 2024 06:19

Firstly, are you properly registered on the TCSP register, if not you should not be doing this. This is not the same thing as "having a practice licence"

I would be surprised if you are licensed for this via a professional body given that you have never done it before

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By lesley.barnes
03rd Jun 2024 10:01

As others have said - if potential client already has an accountant you need to think carefully. Why has he not asked them set up the Company and act as accountants? Is the client hiding funds for some reason? The explanation of keeping the two companies separate potentially won't work. Will there be no links at all between the two companies? Would they not be associated, have you checked this out? Any VAT implications?

We don't know enough about the Companies other than the one you are incorporating is an Investment Company, do you know were the funds are coming from, have you checked that out?

I ask these questions not to be obstructive but you've said yourself you've just set up a business, sometimes people take advantage. Posters on here have years of experience and between them will have seen it all. You need to think about if the client walks away you will be left with the Company registered at your address and no way of changing that. Would you be happy to have mail delivered to you or HMRC knocking on your door?

if you are happy everything checks out I would still insist that the Company needs to be registered at the clients address not yours.

https://www.gov.uk/hmrc-internal-manuals/company-taxation-manual/ctm03570

Thanks (2)
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By Financialworld
03rd Jun 2024 10:41

Dear Lesley Barnes,

Thank you for your information. I will take that on board. Each member have contributed immensely. I would register company at clients address.

To avoid all type of Risk.

Thanks to all valuable members.

Financial world

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By ireallyshouldknowthisbut
03rd Jun 2024 14:28

Our of idle curiosity, what sort of background/training enviroment did you have?

This may assist members in any future questions you may have to pitch responses at the appopriate level.

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