Types of UK Limited Liability Companies

 

In the UK there are four types of limited companies that you could form . These are:

  • A Private Limited Company (limited by shares)
  • A Private Limited Company (limited by guarantee)
  • A Private Unlimited Company
  • A Public Limited Company

 

The difference in name of each Limited Company suggests their distinct features. Other forms of business set-ups such as the Sole Trader and General Partnership are not called ‘companies’ because they are not legal entities.

 

A Private Company Limited by Shares:

  • Only 1 member (ie shareholder) is needed
  • Liability is limited to amount owed on unpaid shares (if any)
  • Issues shares
  • Is legally distinct/separate from members
  • Is managed by a Board of Directors

 

A Private Company Limited by Guarantee:

  • Only 1 member (ie shareholder) is needed for Limited Liability Company Corporation
  • Members serve as guarantors and contribute to the Company’s assets in the event of winding up
  • Is legally distinct/separate from members
  • Does not issue shares

 

A Private Unlimited Company:

  • Liability of members is unlimited

 

A Public Limited Company:

  • Is authorised to sell shares to the general public
  • May be listed on a/the stock exchange after limited liability company formation
  • Liability is limited to value of unpaid shares of each member
  • May or may not have share capital for limited liability company registration

 

As regards which kind of UK Company you should form that depends largely on your commercial goals. If you’re not 100% sure as regards which kind of UK Company you should form you should seek (ideally UK + local) legal and or financial advice.

 

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