A List and Brief Explanation of the Types of Companies to be Found in the United Kingdom

The types of companies in the UK are divided into quite straightforward categories. Which type of legal entity to choose depends on your particular requirements. However, the most common company type is the UK Limited Company (Ltd) which is perfect for 98% of our clients.

UK Limited Company (Ltd)

• UK Ltd is the most commonly used type of legal entity.
• The company can have 1 to n share holders (which are called members).
• Members can be of any nationiality.
• Members can be members of other companies.
  
• The minimum capital required is £1.
• There needs to be at least one director. The director does not need to live in the UK and can be of any nationality.
• The company needs to have a registered office in the UK. 
• Suitable for one man-bands or huge companies.
• Pays company tax only on profits. 
• No witholding tax for profits distributed overseas.
• Tax credits on distributed profits to be offset against your personal income tax (only if you live in the UK).

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UK Public Limited Company (Plc)

• Similar requirements to the Ltd company but itended for larger corporations.
• Significantly higher capital requirements (minimum of £50,000). 
• Needs two directors (one of which may be the secretary) and two shareholders, with some restrictions as to who can assume these roles.
• Statutory requirements are more stringent (auditors are required, company secretary is required).
• Normally this type of company is not used by our clients as it more suitable for companies with many shareholders who may intend to go public at some point.

UK Limited Liability Partnership (LLP)

• Consists of one or more members.
• Not a company but a partnership.
• Does not pay company tax but partners pay income tax on their income.
• Similar capital requirements as the Ltd company.
• This type of legal entity may make sense for professional services companies.
• If the LLC has international members they may pay tax in their home country and may be exempt from tax in the UK.

UK Limited Company by Guarantee

• Used only for not-for-profit businesses such as charities.
• Not suitable for profit-making businesses.
• Members are not shareholders in the usual sense.

Interested? Get started now with an initial consultation!