Under United Kingdom law, the Private Limited Company (abbreviated to "Ltd." or Limited Company) is one of the two forms of U.K capital trading company, which for some of its features is very similar to the Italian Limited Liability Company. This corporate form is used in the United Kingdom by more than 95% of companies.
As the name itself indicates, the liability of partners is limited to the amount of contributions, that is, to the shares subscribed and paid.
Establishment of the Limited Company is very fast and can even be done in one day; it is also economical because it does not involve notary fees. Especially when it comes to a "small company", management of this type of Limited Company is particularly informal, economical and rapid. No notary fees are required for corporate operations such as corporate reorganisation, change of corporate purpose, name, company name, partners and closure.
U.K. law does not require a minimum share capital for the establishment of a Private Limited Company, which is often established and managed with one or two shares with a nominal value of 1 pound sterling each.
Since April 1, 2015, the profits of companies in England and Wales are taxed at a single rate of 20%.
One advantage is not being forced to apply for a VAT number if the company expects to have a turnover of less than 83,000 pounds sterling annually. If a VAT number is not required, Limited Company invoices must be issued net of VAT and the VAT on purchases cannot be recovered; on the other hand, the Private Limited Company requires a simplified administrative procedure insofar as it is not necessary to keep a particular accounting system, make quarterly VAT returns, etc. The current rate of VAT is 20% (twenty percent).
The following documents are required for establishing a Limited Company:
It is possible to establish a Limited Company with a sole partner who usually then holds the position of Director; however, this position can also be held by third party non-partners.
Establishment of a Limited Company normally takes place with the filing of all necessary documentation at Companies House. Even though it is a complex activity, establishment of a Limited Company occurs without formal requirements in most cases: no public deed or notary intervention is required. Given that no minimum share capital is required, it is not necessary to make immediate payments to either the Limited Company or to third parties. Having carried out some formal checks, the authorities concerned issue the Certificate of Incorporation which contains the non-modifiable Registration Number of the Limited Company and represents its "birth certificate"; the company name can be changed.
The law requires each Limited Company to keep the following Statutory Books:
As of April 6, 2008, the rules on the form and content of company financial statements have been reviewed and amended. Particular simplifications apply to Small Companies; for these Limited Companies, the deadlines for filing financial statements and other company documentation have also been shortened , there is no need for auditors to review accounts, and fines are fixed for delays in the formalities required by law.
Basically, each year the corporate data relating to directors, secretary in office, partners, registered office, and capital issued and subscribed must be updated with a Confirmation Statement. Annually, and within 9 (nine) months of financial year-end, the Balance Sheet, Profit and Loss Statement and other documentation must be filed.
A Limited Company is defined a "Small Company", and therefore falls under simplified management procedures, when it meets at least 2 of the following requirements in the current and previous financial year:
A Limited Company is defined a "Medium Company", and therefore falls under simplified management procedures, when, in the current financial year and the previous financial year, it meets at least 2 of the following requirements:
The Public Limited Company (abbreviated to "Plc"), which corresponds to the Italian Joint-Stock Company, is rarely used; it exists mainly in the banking, insurance, financial and public company sectors. The latter do not exceed the threshold of 5% of the total number of companies registered at Companies House.
A public company must have a minimum share capital of 50,000 pounds sterling. At least 25% of this amount must be paid at the time of registration.
Unlike private limited companies, a public limited company must appoint an auditor and a company secretary who meets certain eligibility requirements. Only a public company can offer its shares directly to the public. It follows that only a public company may apply for listing on any securities market. When the net assets of a public company fall below the subscribed capital, the law provides for the convocation of a shareholders' meeting to deal with the situation. This obligation does not apply to private companies.
Public companies are subject to special restrictions on the purchase or redemption of their own shares as well as on the granting of financial assistance for the purchase of their own shares and loans to directors.
|Average start-up times||
The United Kingdom has a fast and efficient Registry Office. Businesses can be created electronically in one day.
|Availability of pre-established (ready-made) companies||Yes|
|Published information about the company's directors||
The names of company executives appear in public registers available on internet. Executives can be appointed to prevent the customer's name from appearing.
|Legislation and controls||
British companies are regulated under the "Companies Act 2006". UK Companies House is the reference authority.
|Confidentiality||Bearer shares are not permitted.|
|Currency||U.K. pound sterling|
|Risk indicators||Average political risk: 11%