Types of Limited Companies We Support

Company Limited by shares

It can be argued that this is the most popular company structure. Limited by shares simply means that the liability of the shareholders to creditors is limited to the capital originally invested by each shareholder. For example, if I pay £20,000 to buy 20% of a company where the nominal value of the shares is £10,000 meaning that there is a share premium of £10,000 (amount paid above nominal value for the shares). If things go wrong and the company were to go bust – I am only liable for my original commitment of £20,000. This structure is suitable for people that want to run a profit-making business where they can keep the surplus income for themselves. Profits are distributed to shareholders in relation to the percentage of the company they own. The profits are issued as dividend payments but the shareholders can also choose to reinvest some or all of the profit. Companies limited by shares must:

a) Have at least one director

b) Have at least one shareholder

c) Meet Companies House filing requirements

Company Limited by guarantee

Limited by guarantee simply means that the liability of guarantors (individuals that own the company) is limited to a guarantee which is a fixed sum of money that they will have to pay when the company cannot meet its obligations. This structure is suitable for people that want to set up a non-profit organisation or charity e.g. Academy school. The owners of this type of company usually reinvest surplus income that has been generated by the company rather than taking it for themselves.

Community Interest Company (CIC)

This company structure was introduced in 2005 under the Companies (Audit, Investigations and Community Enterprise) Act 2004. This is suitable for people that want to start a business that helps people or communities i.e. a social enterprise. For more information you can visit https://www.gov.uk/set-up-a-social-enterprise.

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