Business Set Up in United Kingdom

Private Company Limited by Shares

A private Company limited by shares is the most common type of business entity in the United Kingdom. Almost 95% of all the companies registered in the UK are private companies limited by shares. All the private companies limited by shares need to affix the word 'Limited' or 'Ltd.' at the end of their name. The law has not prescribed any minimum share capital for such companies, and any person can start a company with as little capital as £1. The liability of the shareholders is limited to the number of unpaid shares held by them. There is no prescription on the amount paid up on shares at the time of issue. The shares of these companies cannot be offered to the public. These companies should have at least 1 director, and there are no compulsions to appoint a company secretary. These companies are not as heavily regulated as public companies limited by shares.

Public Company Limited by Shares

A public company, often called 'PLC', is a business entity adopted for big businesses due to its ability to make its shares available to the general public through the stock market to raise capital for the business. Again, the financial liability of the shareholders is limited to the amount of unpaid shares held by them. The law prescribes a minimum share capital of £50,000 to incorporate a Public Company limited by shares. Further, a minimum of 25% of the nominal value and the whole of any premium payable on the issued shares must be paid up at the time of allotment of shares. These companies are required by law to have at least 2 directors and a company secretary appointed at the time of registration.

Private Company Limited by Guarantee

In this type of company, there is a pre-agreed amount that the company shall pay to its debtors in case the company shuts down. This form of business structure is usually adopted by non-profit organizations for purposes, viz., charity, education, clubs, unions, etc. These companies do not have shareholders, and there exists no share capital. The members of the company become the shareholders, and the guaranteed amount can be as little as £1.

Private Unlimited Company

The distinctive feature of this type of company is that there is no monetary limit to the extent of liability that may be accrued to the members of the company in case the company shuts down. This type of structure is valid for only those companies that are sure there is no case of insolvency. These companies are also not legally bound to submit their annual accounts to the Companies House.

Community Interest Companies (CIC)

A Community Interest Company is a type of private limited company that has been set up to carry out benefits for the community. Though it is a not-for-profit entity, it has to earn profits to remain solvent and apply the benefits of such profits for the benefit of the community and not for personal gain.

Unregistered Companies

These companies have not been registered under the Companies Act 2006 or any other Act of Parliament. Instead, they are created through Private Acts of Parliaments or a Royal Charter.

Branch Office

A branch office or a registered UK Establishment is a UK-registered overseas company. It has no separate legal personality, and its affairs continue to be governed by the directors and shareholders of the overseas company. This entity is an alternative to the registration of a separate company in the UK. However, a UK establishment has to be registered with Companies House to function as a branch office in the UK. The identities of the directors and authorized representatives shall be publicly available.

It is nothing but a local representation of an overseas company in the UK. This registration with the Companies House must be done within 1 month from the date of commencement in the UK. The cost of its registration depends on the country of registration of the overseas company. Its reporting requirements are similar to that of a UK private limited company. Its registration requires a physical address in the UK, and liability is subject to the requirements of the overseas company. It has to pay taxes only to the extent earned by the UK-based establishment.