Tuesday , 27 June 2017
Brief Guide To Different Kind Of Company Formation

Brief Guide To Different Kind Of Company Formation

The process of company formation is not an easy task. It needs you to take many aspects into consideration like forming a private company or an LLC. In addition, do you desire to launch a business in home state or other friendly states?

Below is a breakdown of different kind of companies along with their main characteristics, which can be formed in the UK. With these details, you will be able to make a decision regarding the kind of company structure you desire.

Company Formation

Types of company and its characteristics

Private Limited Company (based on shares)

  • Suitable for commercial trading purposes in the UK
  • Minimum 1 share and maximum unlimited shares
  • Can have sole director and one shareholder
  • Can operate anywhere across the world
  • Own any preferred name
  • Limited companies shareholders can benefit from taxation
  • Members have some degree of liability
  • Private limited company can be transformed into a public limited company

Private Limited Company (Readymade)

  • Characteristics are same as above
  • Registration number is available instantly on receipt of payment
  • More expensive
  • Transfer of shares registration completion of new directors takes time
  • Choice of company name is restricted

Private Limited Company (guarantee based)

  • Non-profit corporate assets cannot be distributed to members
  • Suitable for membership organizations, clubs and sports association
  • Guarantee company has no share capital
  • Members cannot transfer it because they do not own it
  • Application can be made for charitable status
  • Incorporated within hours

Public Limited Company

  • Shares are made available to public
  • Suitable for any business
  • Initial capital commitment is high
  • Own selection of company name
  • It needs to include two directors and sole shareholder
  • Can function from anywhere around the world

Limited liability partnership

  • Limited liability status is suitable for existing or new partnerships
  • Intended specially for professional partnerships like solicitors and accountancy firms
  • Tax status of partnership gets maintained

Flat Management Company

  • Can be a company limited by guarantee or shares
  • Suitable for property developers aiming to sell apartments or tenements
  • Best to manage property with lots of apartments and flats
  • Flats can be spread across individual owners for easy sale and transfer of each flat

Right to Manage Company

  • Allows leaseholders to manage or buy freehold properties under Commonhold & Leasehold Reform Act, 2002

Community Interest Company

  • Designed for use of social organizations with an aim to employ the assets and profits for public benefit
  • Cannot own a charitable status
  • Needs CIC regulatory approval before incorporation

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