What Is A Limited Company?
Limited companies exist in their own right as legal entities. This means that the company's finances are separate from the personal finances of their owners.
Stockholders may be individual people or other companies. They are not liable for the business's debts unless they have provided guaranties - e.g., a bank loan. Nevertheless, they may lose the money they have put into the business if it fails.
The 3 primary sorts of Ltd companies. Private limited companies are made up of one or more members or shareowners. They cannot offer up stocks to the public. Virtually all small companies are private limited companies. Public limited companies, called PLCs must have at least a couple of stockholders and must have issued shares to the public to an economic value of at least 50,000 in advance of when it can trade. The 3rd kind, private unlimited companies are uncommon and are usually created for limited reasons.
Setting up an Ltd company is comparatively uncomplicated. Firstly, you must register at Companies House. You must name your directors, one for a private limited company and at least 2 for a PLC. Those directors may also be shareowners. Directors have to be aged 16 or more. One of the directors must be a private person as opposed to a company. PLCs must have a qualified company secretary whose details have to be recorded at Companies House. Directors are answerable for notifying Companies House for any alterations to the company's directors or company secretary.
Limited Companies can raise funds via their shareholders, loans or their profits. Plcs can raise money by selling their shares on the stock market. Profits are distributed to shareholders as a dividend, although some of that profit is kept within the company to give it working capital.
All limited companies are required to file accounts with Companies House. Their accounts have to be inspected on an annual basis, although some businesses are exempt from this requisite. It is essential that the directions Companies House provide you with for lodging your accounts are followed to the letter. If the business makes a profit or has any taxable income, they need to notify HM Revenue and Customs of that profit and pay Corporation tax. They will have got to file a tax return annually. Having a competent accountant is indispensable for an Ltd company to make sure that they meet all their responsibilities.
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