If you have been thinking about starting up a company, but are unsure as to the many types of company there are out there, you may find it handy to consult the information below. By considering all of these options you will be able to make the right decision for you and your business, but if you still need help then please get in touch with someone who is a professional at company formation.
Private Company Limited by Shares
This is suitable for the vast majority of companies in the UK, and a company set up in this manner can carry out any kind of business across the entire planet. It is beneficial as the company can be handled solely with the transfer of shares, with the ownership of the business depending on who owns a certain portion of the shares. Another benefit is the limited liability aspect of the company, as this means that in the unfortunate event of the business entering administration, the shareholders and owners of the business do not risk losing personal assets.
Naming your company is quite straight forward as well, with only minor limitations on what you can and cannot do. For more information on naming your company, visit this website.
Private Company Limited by Guarantee
If you are planning on setting up a company primarily for non-profit reasons then this may be the best choice. There are no shareholders but guarantors, who are required to provide a nominal amount towards the business in the event of a shortfall once the business stops trading.
The transfer of profits to members is not allowed with this kind of business, and so you are eligible to apply for charitable status if you so desire. The formation of such a company is also slightly more complex than with a “limited by shares” company, so take this into account as well.
Public Limited Company
This is the only type of company that can offer its shares to the public, so bear this in mind if you are looking to become listed on the London Stock Exchange. As with the Private Limited Company you are able to undertake any kind of business across the world, with almost full choice of what name you would like to use. In addition to this, shareholders have limited liability for their peace of mind.
Some requirements of a PLC are quite strict, so take heed:
- Minimum capital of £50 000 required, with £12 500 of this fully paid up in advance.
- At least 2 directors.
- Company Secretary with the required professional qualifications.
Limited Liability Partnership
This combines the benefits of a standard partnership with the added bonus of being limited liability, allowing you to feel secure in the event of administration. You can attain LLP status whether you are an existing partnership or a newly formed one, and as the tax status and structure of an LLP is very similar to that of a partnership you may well be advised to undergo the transition as it could be very beneficial for your business.
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