With connections to relevant resources, this synopsis references the information included in the subtopic Types of UK Companies.
Almost 4.5 million firms are listed on the public register, making the corporation a highly popular tool for conducting business.
Distinct from its members, a firm is a separate legal body. The members own it, and the directors oversee its management.
Under the Companies Act 2006 (CA 2006), the ensuing company categories are governed and comprised of:
- Public companies limited by shares
- Private companies limited by shares
- Private companies limited by guarantee, and;
- Unlimited companies.
In the UK, there are two more types of companies:
- Community Interest Companies (CICs), which are partly regulated by CA 2006 but are primarily governed by specific CIC legislation, and;
- Unregistered companies, which are not governed by CA 2006
In the UK, there are several other options for business vehicles than companies.
There are numerous additional options for business vehicles that are taken into consideration in practice that might be used to conduct a business.
Note: Additional stuff related to that subtopic as well, as types of business vehicles.
Private company limited by shares
A private or public company might be a firm limited by shares. Although all businesses limited by shares have many of the same essential characteristics (separate legal identity, restricted liability, etc.), private corporations are subject to less stringent CA 2006 regulations and requirements than public companies.
A private corporation limited by shares is identified by the absence of a minimum issued share capital requirement, no limitations on the amount of money paid for shares in circulation, and the inability to offer shares for sale to the general public (CA 2006, s 755). Private limited companies must have at least one director (CA 2006, s. 154). They are not required to have an annual general meeting or a company secretary; however they are free to do so (CA 2006, ss. 270). The words “limited” or “ltd” (or their Welsh counterparts) must appear in the company’s name, with few legislative exceptions (CA 2006, s 59). View more information in:
- Private companies limited by shares
Private company limited by guarantee
Limited corporations can be divided into two categories: companies limited by shares and companies limited by guarantees. A corporation limited by guarantee does not have “shares.” Members commit to pay a particular sum if the company is wound up, rather than owning shares in the company. Organisations that run non-profit businesses, such as clubs, associations, and charities, frequently employ them.
Unlimited companies
An unlimited company is a private company whose members are not restricted in their ability to pay the firm’s debts upon dissolution. Although they are less frequent, people may choose to employ an unlimited company instead of a limited company as their preferred kind of business vehicle for two main reasons: flexibility and secrecy.
Community interest companies
A particular kind of limited liability company called a community interest company (CIC) is created with the express intent of conducting business for the betterment of the community. Although CA 2006 partially regulates it, other laws that explicitly deal with CICs are the primary source of regulation. In addition to following the standard procedures under UK company law, further restrictions bind a CIC to guarantee that its resources, earnings, and profits are allocated in the best interests of the community it is meant to assist. It is not a “not-for-profit” organisation because it needs to make money to stay afloat; nevertheless, the money it makes will advance its charitable goals rather than being retained for personal benefit.
Unregistered companies
An unregistered company is a rare form of incorporated company not formed or registered under CA 2006 or any other public general Act of Parliament. Unregistered companies include companies formed under private Acts of Parliament (note this differs from a public general Act of Parliament) or royal charter. Companies created by royal charter encompass the most significant number of unregistered companies.
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