When starting a business, there is so much to think about, making it somewhat of an overwhelming experience, especially when you’re unfamiliar with the technical terms and jargon involved in company formation.

At CRO, we know how confusing this can be for entrepreneurs and business owners. That’s why we have created this blog to help you demystify the complex terminology that comes up during the process of establishing a company. Breaking down these concepts into simple, easy-to-understand pieces of information means we can help current and future business leaders make the best decisions for their company and guarantee a smoother path towards their business goals.

So, allow us to decipher the confusing terms, and you will be able to move past the jargon and set up your new business with confidence.


ACRA (The Association of Company Registration Agents)

A regulatory body that makes sure its members operate at the highest standards in the company registration industry. It offers guidelines and accreditation for companies like ourselves to provide formation services.

Articles of Association

The document outlining the rules governing the operation of a company, including details about the rights and responsibilities of directors and shareholders, the distribution of profits, and organisational structure.



This refers to the financial assets needed by a business to produce the goods and services it offers. In the context of company formation, it often relates to the initial money invested into the company.

documents on a laptop

Companies House

The official regulatory agency for company registration in the UK responsible for maintaining the register of companies. Other countries have equivalent agencies.

Company Formation Agent

A professional service provider, like ourselves, specialising in company registrations for their clients by handling the legal and administrative tasks involved in company establishment.

Company Secretary

An officer appointed by the directors of a company, responsible for ensuring compliance with financial and legal practices and maintaining high corporate governance standards.

Corporate Governance

The system of rules, practices, and processes by which a company is directed and controlled, balancing the interests of its various stakeholders.


Dormant Company

A company registered but not currently engaging in business activity or receiving income. Often used for protecting a company name or holding an asset.

Due Diligence

A comprehensive examination of a business or individual prior to signing a contract or an act, often a voluntary investigation to ensure all relevant facts and financial information are considered.


Limited Liability

A form of business protection for company owners and shareholders, where their responsibility for the company’s debts is limited to the amount of money they have invested in the company.

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The memorandum is a legal statement which confirms that the subscribers wish to form a company and agree to become its first members. In the case of a company that is to have a share capital, they undertake to subscribe for at least one share each.


Nominee Services

Professional services used to appoint stand-in directors, secretaries, or shareholders for privacy or administrative reasons, keeping actual individuals’ information private.


Registered Office

The official address of a company where all communications and notices are sent. This must be a physical location in the company’s country of registration.


Shareholder Agreement

Contracts among the shareholders of a company that outline how the company should be operated, along with the shareholders’ rights and obligations.

SIC Code (Standard Industrial Classification)

A system for classifying industries by a five-digit code. Government agencies and others use it to classify industry areas, including when registering a company.

Sole Proprietorship

A business structure where the business is owned and run by one individual, who is responsible for all of the business’s obligations.


Unlimited Company

A company structure where the owners or shareholders have no limit to their liability for the company’s debts. This setup is less common than limited liability companies.

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Why It Is Essential to Understand These Terms

When starting a business, you must be able to understand the jargon and technical language that comes with company formation. As detailed above, this language often represents vital legal concepts and obligations that businesses need to comply with, making sure they start off on the right foot. By grasping this terminology, you can confidently navigate legal documents, contracts, and regulations, reducing the risk of unintentional breaches that could lead to penalties or legal issues. Additionally, having a solid understanding of this language empowers you to make the best decisions for your company, enabling you to interact more smoothly with legal, financial, and regulatory bodies.

However, we know this is a challenging task, and there is a lot to memorise, understand, and navigate, which is why we are here to help.

Company Formation Made Easy with CRO

At CRO, our main goal is to simplify the company formation process. We take pride in cutting through the jargon and intricate language typically associated with this sector. Our bespoke online company registration services, approved by ACRA, are specifically designed to remove complexities. This approach of eliminating the technicalities makes company formation straightforward, allowing business owners and decision-makers to focus on what truly matters: their core business. So, get in touch with the team at CRO and experience a hassle-free, professional company registration process.