Types of UK companies

There are many different types of companies in the UK such as Private Company Limited by Shares, Private Company Limited by Guarantee, Private Unlimited Company and Public Limited Company. All companies that are not public companies are effectively private. Private companies range from a very small family company to a subsidiary in a large group of companies. Very often, they are trading vehicles for one or two individuals who want the benefit of limited liability or the added prestige of trading as a company. The most popular is a Private Company Limited by Shares. This type of company is suitable for majority of commercial enterprises.

Private Company Limited by Shares (Ltd)

This is the most popular type of a company in the UK as it can be used for majority of commercial enterprises. Private Limited Company by Shares has a share capital and the liability of each member is limited to the value of any investment they have made in the shares of the company. This type of company cannot offer its shares for sale to the general public and must use letters ‘Ltd’ or ‘Limited’ after its name. A private company limited by shares can become a Public Limited Company but it will have to re-register in order to do this.

Main advantages

  • Limited Liability
  • Protection from risk
  • Possible reductions of tax bills
  • Prestige
  • A company name is protected
  • There is no obligation for a limited company to commence trading after its incorporation

Private Company Limited by Guarantee

This type of company does not have any share capital and its members are effectively guarantors rather than shareholders of the company. Their liability is strictly limited to the amount they have agreed to contribute to the company’s assets if it is dissolved. Private Company Limited by Guarantee is often used for different social enterprises, charities or any other not profit organisations, such as political parties or sports clubs

Private Unlimited Company

Private Unlimited Company may or may not have a share capital. Members’ liability is unlimited and they can be required to pay the company’s debts without limit.

Public Limited Company (PLC)

This type of company has a share capital and limits the liability of its members to the amount unpaid on their shares. A Public Limited Company’s stock can be acquired by anyone and it may be quoted on the stock exchange. It is a legal form commonly used in the UK and is similar to that of a private company limited by shares. However the main difference is that shares of a Public Limited Company can be sold to the public. Of course, as a result there are additional legal requirements that must be met. It is important to note that a public limited company cannot conduct business unless it has obtained a trading certificate from Companies House which confirms that it has the minimum allotted share capital. This type of company must use letters ‘plc’ after its name.

Limited Liability Partnership (LLP)

A Limited Liability Partnership is an alternative corporate business vehicle which gives the benefits of limited liability but at the same time allows its members the flexibility of organising their internal structure as a traditional partnership. This legal entity is very often used by large firms of lawyers and accountants to enjoy both the tax benefits of a partnership and of course the limited liability of a company.

If you are interested in any of the above entities, please contact one of our consultants on or call +44 (0) 020 7060 7326.


Help and advice
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