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types of limited companies

Types of limited companies in the UK

Limited Companies

A limited company is a business structure that is set up with Companies House and is commonly used by professional contractors and several other small businesses in the UK.

New businesses can typically be categorised as one of three forms: sole proprietorship, partnership, or limited company. Each enjoys its benefits, but forming a limited company is ideal if you want to grow your business. Limited companies are the second most popular form of businesses in the UK.

When a new limited company is formed, it has a legal identity that is independent from its directors and shareholders and is responsible for its own finances. As a result, it is beneficial for business owners to set up a limited company to benefit from the company profits without personal liability.

There are several types of limited companies in the UK. A private limited company by shares is the most common structure for most companies in the UK.

List of all the types of Limited companies you can set up in the UK.

Private limited by shares (Ltd)

This is the most common type of company in the UK. A private limited company by shares is usually owned by one or more shareholder(s) and managed by one or more director(s). These business structures limit the liability of shareholders to the value of their shares.

Private limited companies by shares must:

  • Be incorporated with Companies House
  • Must have a minimum of one director and one shareholder (both can be the same)
  • The directors must be prepared to provide their details on the Companies House register
  • The directors must file statutory reports on a timely basis to Companies House and HMRC
  • Must file a CT600 (Company tax return) and pay corporation tax at the prevailing rate

Private limited by guarantee (Ltd)

A private limited by guarantee structure is used if you are planning to run a not for profit organisation. This company will not distribute its profits to its members. A private limited by guarantee company is owned by one or more guarantor(s) and managed by one or more director(s).

Private limited companies by guarantee must:

  • Be incorporated with Companies House
  • Must have a minimum of one director and one guarantor (both can be the same)
  • The directors must be prepared to provide their details on the Companies House register
  • The directors must file statutory reports on a timely basis to Companies House and HMRC
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Limited liability partnerships (LLP)

A limited liability partnership is like a traditional partnership, however, it has the added benefit of limited liability. A limited liability partnership is owned and managed by two or more members.

Limited liability partnerships must:

  • Be incorporated with Companies House
  • Must have a minimum of two members
  • Must have two “designated” members who are responsible for filing and reporting on behalf of the LLP
  • Must file a partnership tax return to HMRC.

Public liability company (Plc)

A public liability company is similar to a private limited company, however, the main difference is that a public liability company will offer its shares to members of the public. A public limited company is owned by two or more shareholders and two or more directors.

Public liability companies must:

  • Be incorporated with Companies House
  • Must have a minimum of two directors and two shareholders
  • A minimum issued share capital of £50,000
  • The directors must be prepared to provide their details on the Companies House register
  • The directors must file statutory reports on a timely basis to Companies House and HMRC
  • Must file a CT600 (Company tax return) and pay corporation tax at the prevailing rate

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