Of the different registered company types you can choose to go for, by far the most common in the UK is a private company limited by shares. You can quite easily recognise these companies as they will usually have the suffix Ltd at the end of their company name.
A Private Company Limited By Shares becomes a legal entity in its own right and exists completely separately from the owners of the business. To set up this type of company you would need to have at least one or more directors or company owners who will be issued with company shares. The business should be set up to run with an aim to make a profit. The profits made by the company will then be awarded to the shareholders in the form of dividends. This is one of the most popular types of company formation we do and if this is the most suitable option for you, our experts can get your new company formed within just a few short hours during a regular working week day.
You can also choose to register as a Company Limited By Guarantee. This is a company that has a structure very similar to a company limited by shares, however this type of company doesn’t have any shareholders. Instead of having registered shareholders, a Company Limited By Guarantee will have members that will act as guarantors for the company. The members will pledge to guarantee and contribute an agreed amount of money should the company have to be wound up. It is quite common for this type of company to be set up to run a not-for-profit business, such as a community organisation or local sports club. Any profits made are usually put back into the business to help cover running costs, improve or maintain their facilities, provide and replace equipment etc.
Another popular formation type is a Charity Company. Normally, anyone wishing to set up a charity group in the UK would have to first form a Company Limited by Guarantee as is explained above, but would actually form it with a memorandum and articles of association that meet the requirements set out by the Charity Commission. Once formed, the company can then go forward to be registered with the Charity Commission to be officially recognised as a registered charity.
There is also an option to form a Community Interest Company (CIC). This type of formation is a modified version of either a Private Company Limited by Shares (Ltd) or a Company Limited by Guarantee. The Community Interest Company will be able to make a profit, but most are formed for non-for-profit reasons, so any profits generated would be put towards the social aim of the company.
Another well-recognised company formation is the Limited Liability Partnership, or LLP. These types of companies are often set up by professional bodies such as solicitors and accountants where two or more individuals go into partnership together. This means that each individual professional can work independently and have their own client base, but will be able to have the shared protection of being a registered limited company.
A Public Limited Company is again something very similar in structure to a Private Limited Company, however it is allowed to sell company shares to the public. A Public Limited Company must be able to show that at least £50,000 of shares have been issued before it can begin trading. To register as a Public Limited Company there must be a minimum of at least two company directors appointed. The benefit of this type of company formation means that it can generate extra funds for the company as and when needed by selling more shares. This does result in the ownership being diluted and having very many more shareholders than the company was originally set up with.