Limited Companies
These are incorporated. They have to be registered with Companies House. A public limited company (plc) has a minimum of £50,000 issued share capital. A private company limited by shares does not have a minimum shareholding but, unlike a plc, it cannot issue shares to the public.
In the voluntary and community sector, the private company limited by guarantee is the most common type of company. This legal structure means that all of the members guarantee to pay a nominal sum (usually £1) in the event of the company being wound up. A private company limited by guarantee cannot issue shares and cannot pay dividends to members.
Features
- The governing document is the memorandum and articles of association.
- The basic structure is the membership and the board of directors.
- Registration with Companies House is cheap and straightforward.
- The administrative requirements are relatively onerous.
- There are fines for non-compliance with regulations.
- Information on companies, including details of directors, is available to the public.
- Incorporation means that the company has its own legal personality, separate from those of its members.
- The members’ liability is limited to the guarantee.
- Legal arrangements such as loans, leases and contracts are taken out in the name of the company, rather than the names of individual members.