UK LIMITED COMPANIES

London is the largest financial center in the world and one of the most important centers for international trade. It has the largest concentration of branches of foreign banks and multinational companies. The commercial and banking system is one of the leanest, most advantageous and solid in the world, and therefore the economies of many other countries are inspired by it. Social and economic policy is based on a meritocratic-competitive system, with levels of corruption at the lowest in the world.

There are several types of companies in the United Kingdom. According to the Companies Act 2006, the main forms foreseen by the British legislation are:

- LTD (Private Limited Company) *;

- PLC (Public Limited Company);

- LLP (Limited Liability Partnership);

- LBG (Limited by Guarantee).

Below we report the most salient information of the Limited company, which affects the majority of customers and is commonly known as LTD or Limited (Private Limited Company, which can not be listed on the stock exchange), and of the other commonly called PLC (Public Limited Company, which can be listed on the stock exchange).

So a Limited Company can be "private" or "public". The legal declarations and public information required to a Private Limited Company (LTD) are very few and for this reason its shares can not be sold on the stock exchange, while a Public Limited Company (PLC) must provide more accurate documentation on its progress financial and therefore can sell its shares on the stock exchange. Most companies, and especially small and medium-sized companies, are 'private' (LTD).

LLP, on the other hand, is a relatively young company form in the UK, generally chosen by lawyers and accountants, in which members join in partnerships (further information below).

* this can be Limited By Shares (with share capital), the one to which we refer here, or Limited By Guarantee (without capital, often used by Charities / ONLUS). Given the limited use of the latter (by Guarantee), we have reported only some information at the end of the page.

LTD or LIMITED (Private Limited Company)

General characteristics

This type of company is the most common in England, Wales, Scotland and Northern Ireland. It is made up of shareholders with limited liability and its shares can not be sold on the stock exchange, unlike the shares of Public Limited Companies. A joint-stock company in which the responsibility of the shareholders (= shareholders) is limited to the capital initially invested, according to the British legal system, is defined as Private Limited Company.

Limited (= Ltd) is considered a legal entity distinct from shareholders and directors, therefore, for example, any debts incurred by the company in the course of its business are liabilities of the company itself.

Advantages

The establishment of this type of company can offer multiple benefits to entrepreneurs. Here are some:
 
- very short establishment times: one day;
- costs of establishment considerably low: no need for a notary;
- unnecessary share capital: in the United Kingdom it is possible to set up a company with only one pound;
- simple and efficient management;
- minimum bureaucracy;
- lower taxes on profit: the United Kingdom enjoys a tax on companies' incomes below the European average;
- tax optimization, including through the possible opening of a secondary office in other countries;
- possibility to make personal assets for precautionary purposes to the company Limited;
- possibility of opening an account in the name of the company in the United Kingdom or in another EU country, even without the need for a  presence in person;

Moreover, there is a very interesting possibility contemplated by the British laws: the confidentiality of personal data.

In the United Kingdom it is possible to manage a Limited company through a "person or company in charge" (= nominee), thus guaranteeing the absence of their data from public registries. Therefore both the director (administrator) and the shareholders can be nominees (persons appointed for the purposes of privacy).

Establishment of a Limited Company

Establishment of a Limited Company takes place with the filing of all necessary documentation at the Companies House.

The actual registration takes place within the next day.

This documentation concerns:

• The name of the company and the registered address;

• At least one director (Director);

• At least one shareholder;

• "Memorandum of Association" (Constitutive Act);

• "Articles of Association".

Name of Limited For Private Companies Limited by Shares

It is mandatory to have the suffix "Limited" (often abbreviated "Ltd" or "Ltd.") in your name. In addition, the name of the Limited may not: - be the same as any other name already registered at the Companies House - contain words or 'reserved' expressions unless permission is obtained, - imply a connection with the government or local authorities - be offensive.

Address of the Limited Company (Registered Address)

The official communications of the Companies House (British Chamber of Commerce) and the HM Revenue & Customs (Revenue Agency) will be sent to the address of the registered office, known as "Registered Address". This may or may not correspond to the "Business Address". The "Registered Address" is the one that appears in the Public Registers.

Director

Upon registration, the company is required to report at least one Director who will be legally responsible for the management of the company. This can not be less than 16 years and can not be disqualified from holding this position. The role of Director can be played by all European citizens: no British citizenship or residence in the UK is required. The Director has the task of ensuring the correct management of the company and can also be a shareholder. Directors can be "Nominee Directors" .

Shareholders  

To register a Limited it is necessary to make a 'declaration of capital'. This includes: - defining the number of shares in the company and their total value (share capital); presenting the names and addresses of all shareholders (may be nominees). While a maximum number of shareholders is not contemplated, each Limited must include a minimum shareholder: we specify that the Director or Directors may also be shareholders. A company registered in any State may also be a shareholder. Shareholders may be "Nominee Shareholders" .

Memorandum of Association 

The Memorandum of Association is a declaration, drafted by all the shareholders, with which everyone confirms the intention to establish the company and become a member. It is a document that establishes the company name, the place where the registered office is located, the activities that can be carried out and the maximum amount of capital that the Limited can issue. It is customary to indicate a general corporate purpose (General Commercial Trading) that includes most of the most common activities.

Articles of Association

The  document represents  the management rules of the company and must be accepted by the Director and the shareholders. It has the regulation of decision-making in society and the role of shareholders in this process. Most companies use a Standard model, but you can modify it or draw up a Statute according to your needs.

Certificate of Incorporation

Registered the company, the competent authorities issue the Certificate of Incorporation, which shows the registration number that identifies the Limited. This confirms the legal existence of the company.

PLC (Public Limited Company)

Below we report only the salient information for the PLC, being less required. For more detailed information please contact us.

General Features and Minimum Requirements to set up a "Public Company Limited by Shares"

A "Public Limited Company" (or PLC) is a Limited Company that can sell its shares in Britain, Ireland and in the Commonwealth countries. Your name must include the words "Public Limited Company" or its abbreviation "Plc". Welsh companies may choose to end their name with "cwmni cyfyngedig cyhoeddus" or "c.c.c.". 

Registration address in Great Britain. The official communications of the Companies House (British Chamber of Commerce) and of HM Revenue & Customs (Revenue Agency) will be sent to the address of the registered office, known as "Registered Address". This may or may not correspond to the "Business Address". The "Registered Address" is that which appears in the Public Registries. Two shareholders (person or company).

At least two shareholders are required who can be of any nationality and reside in any country. There is no limit to the number of shareholders and the same person can be both shareholder and Director. A company registered in any State may also be a shareholder.

Two directors (at least one natural person). At least one physical person director is needed to establish this type of British company, however a maximum number of Directors is not foreseen. The directors of a company can be of any nationality and reside in any country. Physical presence is not required and the same person can also be a shareholder.

Secretary. Unlike Private Limited Companies, at least one secretary is required who is a natural person. The secretary must be qualified in one or more of the following ways:

• He must have served as secretary of a Public Limited Company for at least three years of the five years prior to the office for the company being established; or

• He is a lawyer admitted to every part of the United Kingdom; or

• It is a person who by virtue of his experience appears to the Directors capable of fulfilling that role; or

• He is a member of one of these groups: The Institute of Chartered Accountants in England and Wales, The Institute of Chartered Accountants of Scotland, The Institute of Chartered Accountants in Ireland, The Institute of Chartered Secretaries and Administrators Chartered Institute of Management, or The Chartered Institute of Public Finance and Accountancy.

LLP (Limited Liability Partnership)

We report below only the most important information for LLP, being less required. For more detailed information please contact us.

General Features and Requirements for the Constitution of an LLP

Members of a British LLP are not personally responsible but have a collective responsibility ("joint") to the extent that they can join in an LLP agreement. Therefore the responsibility is limited to the capital invested in the partnership. They have no individual responsibility for the actions of the other members. This is a fundamental difference compared to a traditional partnership in which the members are fully responsible for the actions of all the members of the Partnership ("joint and several liability"). As with a Limited Company, members cannot, in the absence of fraud and illegal trade, lose more than they have invested. This corporate structure is usually used by professional organizations, such as lawyers and accountants.

In relation to taxation, however, a British LLP is similar to a Partnership: it does not pay any tax in the UK, but its members individually pay taxes in connection the income they receive through the LLP.

Two members. At least two members are required to form an LLP and at least two members must be designated members of the LLP.

Two designated members. The designated members act on behalf of the LLP as the Directors in the Limited Companies. They must keep accounts, submit reports, and perform certain tasks. If the designated members are not specified then all the members of the LLP are considered designated and consequently are responsible for the reports and tasks to be performed.

Required Responses. Although the LLP is not subject to taxation, the "Annual Return" must be presented annually for information purposes. The same document must also be presented annually to the Company Registrar.

LBG (Limited By Guarantee)

Below are only the main information for the LBG, being less required. For more detailed information please contact us.

General Characteristics of an LBG

A Limited By Guarantee is a type of alternative company to the most commonly used Company Limited By Shares (LTD). This type of company is used above all by non-profit organizations that need legal personality. Normally it has no social capital or shareholders, but rather consists of Members functioning as "Guarantors". The latter contribute with a minimum amount of money necessary in the eventual closure of the Limited. This type of company can not distribute profits to its members, but depending on the regulations decided in the constitution this may not be true. They use these club clubs, sports associations, student unions, non-governmental organizations and non-profit organizations.

For all information on other types of British companies or explanations on the types illustrated above, please contact us. We will be happy to offer you our help.