Company Types in Common Use
Company Types explained
Not all Companies in the UK operate in the same way, some limit liability, others don’t, some have shareholders, some don’t. When registering a company it depends on who owns the company and which of those people are responsible for the company’s liabilities which defines the company type registered.
The different company types have important legal ramifications in terms of the status of the company, particularly with regards to ownership and what happens if the company goes into liquidation or has financial difficulties. There are also implications when it comes to filing accounts and the company number prefix.
Detailed below are the most common company types you may come across.
|Public Limited Company||PLC||A public limited company (legally abbreviated to PLC) is a type of public company as defined under the Companies Act 2006. It is a limited liability company whose shares may be freely sold and traded to the public. A PLC may also be privately held including by other companies. With a minimum share capital of £50,000 and usually with the letters PLC after its name. Public limited companies will also have a separate legal identity.|
|Private company limited by shares||Ltd, Limited||A Private Company Limited by Shares is a class of Private Limited Company incorporated under the Companies Act 2006. It has shareholders with liability limited to the value of the investment in the company. Its shares may not be offered to the general public, unlike those of a public limited company.|
|Private company limited by guarantee||LBG||Under the Companies Act 2006, a company limited by guarantee (LBG) is an alternative type of corporation used primarily for non-profit organisations that require legal personality. A company limited by guarantee does not usually have a share capital or shareholders, but instead has members who act as guarantors. The guarantors give an undertaking to contribute a nominal amount (typically very small) in the event of the winding up of the company|
|Private unlimited company||ULL||An unlimited company ("ULL") or private unlimited company is a hybrid company incorporated with or without a share capital but where the legal liability of the members or shareholders is not limited. This means its members or shareholders have a joint and non-limited obligation to meet any insufficiency in the assets of the company settle any outstanding financial liabilities in the event of the company's liquidation. ULLs do not have to file public accounts offering greater secrecy.|
|Limited liability partnership||LLP||A limited liability partnership (LLP) is a partnership in which some or all partners have limited liabilities. In a LLP, each partner is not responsible or liable for another partner's misconduct or negligence. In a LLP, some or all partners have a form of limited liability similar to that of the shareholders of a corporation. Unlike corporate shareholders, the partners have the right to manage the business directly. An LLP also contains a different level of tax liability from that of a corporation.|
|Limited partnership||LP||A limited partnership (LP) must have at least one General Partner (GP) and one limited partner. General Partners are in the same legal position as partners in a conventional firm: they have management control, share the right to use partnership property, share the profits of the firm in predefined proportions, and have joint and several liability for the debts of the partnership.|
|Societas Europaea||SE||A Societas Europaea (Latin for European society or company) is a public company registered in accordance with the corporate law of the European Union (EU), introduced in 2004 with the Council Regulation on the Statute for a European Company. Such a company may more easily transfer to or merge with companies in other EU member states.|
|Royal Charter||RC||A royal charter is a formal grant issued by a monarch under royal prerogative. Since the 14th century they been used to grant a right or power to an individual or corporation. They were, and are still, used to establish significant organisations such as boroughs universities and learned societies.|
|Community interest company||CIC||A community interest company (CIC) is a type of company designed for social enterprises that want to use their profits and assets for the public good. CICs are intended to be easy to set up, but with some special features to ensure they are working for the benefit of the community.|
|Charitable incorporated organisation||CIO||The main intended benefits of thiS entity is the ability to conduct business in its own name under limited liability so the members and trustees do not have to contribute in the event of financial loss. These are already available to limited companies; charities can be formed as companies, but then they must be registered with both Companies House and the Charity Commission. In contrast, the CIO only needs to register with the Charity Commission.|
|Overseas Company||OC||The fact that an overseas company is carrying on business in the UK does not automatically mean that it has to register with Companies House. Registration of an overseas company is only required when it has some degree of physical presence in the UK (such as a place of business or branch) through which it carries on business.|