Address requirements can cause a great deal of confusion when setting up a business. If you find yourself in this situation, you’re not alone. When you start any type of small business, whether you set up as a sole trader or register a limited company, you will need to nominate at least one address for contact purposes for HMRC and your clients and suppliers.
Similarly, Limited companies are also required to provide a number of contact addresses for Companies House. This blog will break explain the requirements and purpose of each these addresses.
Sole trader addresses
Freelancers, contractors, and small business owners operating as sole traders are asked to supply a home address and business address when they register with HMRC as self-employed.
If you work or trade from non-residential business premises (e.g. a store, warehouse, studio), you will probably want to use that address as your official business address. If you run your business from home, you can simply use your private residence as a business address.
However, some small business owners prefer to use a professional address service from a third party. Many types of businesses, including company formation agents, accountants, and mail-receiving providers like MailBoxes Etc, UPS, and the Post Office offer professional address services for letters, as well as different sizes of physical mailboxes for larger packages and customer returns.
These types of services are great if you want to keep your home address private, create a more professional image, accept deliveries and customer returns at all times of the day. It also has the potential to give your business a presence in an area different to where you actually trade or operate.
Limited company addresses
Limited companies (and Limited Liability Partnerships) have different address requirements to sole traders. They have to provide a variety of addresses for Companies House. These addresses are made available to the public on the central register of companies.
Registered office address
When you fill out the application form to register a limited company, you will need to supply a registered office. This is where your Company will be legally based from and will be included on the public register and used by UK government agencies, including Companies House and HMRC, as your business’ official contact address.
Almost any type of address can be used here, including your own private residence. However, you must choose an address that is located in the UK (England & Wales, Scotland, or Northern Ireland, depending on where you have registered). It cannot, however, be a PO Box.
When selecting an address, it’s important to think about the impression you want to make. A home address will not convey the same level of professionalism, prestige, and trust as non-residential commercial premises. And remember, your registered office details will appear on public record, so you may not want to jeopardise your privacy.
You will be asked to provide service address details on the company formation application. This information must be supplied by officers (a.k.a. directors and company secretary), members/subscribers (the shareholders or guarantors who set up the company), people with significant control (PSCs), and members of Limited Liability Partnerships.
Like the registered office, this information will be publicly available. The holder of each service address will receive their mail from UK government agencies (such as Companies House and HMRC) here.
Whilst your residential address can be used here too, you may again want to consider using a separate address as a matter of privacy. Unlike the Registered Office, your service address can be anywhere in the world, so it does not have to be in the UK.
A Single Alternative Inspection Location (SAIL) address is optional and not particularly common with small companies. It is essentially an ‘alternative’ to the registered office for storing your company’s statutory registers and making them available for public inspection.
Companies tend to use a SAIL address for convenience. For example, if the registered office is not easily accessible for directors due to its location, or if a service provider is maintaining the books for them.
SAIL addresses are a matter of public record and need to be in the UK. This can be either a residential address or commercial premises.
A business address is optional and may or may not be the same as your registered office. For example, your company could have a registered office in one part of the country, and one or more business addresses located in the UK and/or abroad.
It could be the address of your shop, office, studio, garage, factory, etc. The place where your business trades from and/or where customers can contact you. This information is not supplied to HMRC or Companies House for inclusion on the public register.
Customer returns/shipping address
If you operate an e-commerce business, you will need to set up a suitable address for accepting deliveries and customer returns. This may or may not be the same as your business address. It needs to be accessible to postal workers and couriers during business hours, so you may not want to use your home address for this purpose if you are likely to be out of the house a lot of the time. This is where professional mailbox services come in. A commercial shipping and returns address also creates a more credible, trustworthy image than a home address.
The term ‘trading address’ is often used interchangeably with ‘business address’. It is the location where your business operates/trades from. However, some companies have a single, central trading address and multiple business addresses if they have branches in various places. This is quite common with large corporations, chain stores, and franchise businesses.
Creating a positive image
If you’re running a company, the law requires that your registered office address is clearly stated on your website and all forms of communication. Your choice of address is therefore very important and will impact the way your business is perceived. Even if you’re operating as a sole trader, you’ll likely have a website, or at least business cards and letterheads. This means your business or shipping addresses will need to be included.
A residential registered office or business/shipping address like Flat 1, 25 York Street, Liverpool will not be as appealing or credible to potential customers or associates as a well-known or recognisable commercial address in a town or city. With the availability of Google Maps, it’s increasingly common for people to view the location of a business prior to ordering products or services. An image of an apartment block simply does not instill the same confidence as a commercial building.
Image is incredibly important in business, so it’s worthwhile taking your time when choosing your addresses. First impressions really do count and can make or break your venture. Think about how you want to be perceived and go from there. With so many affordable and flexible address and mail-receiving services available, you have plenty of options for maximising the professional image of your business.