Understanding A UK Limited Company

Author: Cedric Davion

Understanding A UK Limited Company

The UK has an open, transparent and business-friendly system to encourage the formation of new businesses. Therefore, a lot of entrepreneurs establish new businesses every year in the UK.

A UK Limited Company is a company in which the liability of the members of the company is limited or restricted to the amount they have invested or guaranteed in the company. UK Limited companies can be limited by shares or by guarantee. A UK limited company can be either a public limited company or a private company limited.

Under the UK company law, any company is considered as a separate entity from the people who own it or operate it. Therefore, the company needs to be incorporated or as it is known as company registration takes place.

The registration of a UK limited company is done through Companies House, Executive Agency of the Department for Business, Innovation and Skills (BIS) that operates offices in London, Cardiff, Edinburgh and Belfast. "Companies House" is the Registrar of Companies in the United Kingdom.

All UK Limited companies are registered companies are incorporated and registered here along with file specific details. Independent professional advice on forming a company in the UK can also be obtained from accountants, solicitors and company formation agents.Therefore, the company needs to be incorporated or as it is known as company registration takes place.

The registration of a UK limited company is done through Companies House, Executive Agency of the Department for Business, Innovation and Skills (BIS) that operates offices in London, Cardiff, Edinburgh and Belfast.
These days, individuals, specialized agents, solicitors incorporate a majority of UK companies on the same day electronically. The electronic process can be accessed using compatible software that works with the Companies House eFilling service and an account with the Company House.

A UK Company Formation share capital is established at the time of incorporation. All private UK limited companies that are limited by shares must have a share capital of at least one share. The directors of the company have to decide upon 2 important factors – the type of shares they wish to create and the face value of each of those shares.

Prior to the Companies Act 2006, it was mandatory for companies to declare their total capital at the time of incorporation. The company could only issue that many number of shares in total. Later, if the number of shares were to be increased, then the share capital would have to be increased by way of a resolution. The Companies Act of 2006 has removed this restriction and thereby simplifying the share capital for private limited companies.

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