PRIVATE LIMITED COMPANY

A limited company is owned by its members (the shareholders) and run by the director(s), whose assets are protected from loss if the business should fail.  This is sometimes referred to as limited liability.  The company's profits, losses, assets and liabilities are its own.  Because a company has a life of its own, the business can continue despite the resignation or death of any directors or shareholders, and the sale of the business or the introduction of outside investors is simplified.  Reasons for wanting or needing a limited company may include ownership of property, obtaining finance, taxation, status and protection from risk.

PUBLIC LIMITED COMPANY

A public limited company is a company which is registered as such and complies with the following:-

It must state that it is a public limited company both in its memorandum and in its name. The memorandum must contain a clause stating that it is a public limited company and the name must end with 'Public Limited Company' or 'PLC'

It must have an authorised share capital of at least £50,000.

Before it can start business, it must have allotted shares to the value of at least £50,000. A quarter of them, £12,500, must be paid up. Each allotted share must be paid up to at least one quarter of its nominal value together with the whole of any premium.

For example, if a share with a nominal value of £1 is sold for £6, then it is said to have a premium of £5. This premium must be paid to the company, together with a minimum of a quarter of the nominal value of each share. That is £0.25p plus £5, making a total payment of £5.25.

COMPANY LIMITED BY GUARANTEE

Most Guarantee Companies do not have profit making as an objective, and therefore will not wish to issue shares and will usually have non-profit distribution clauses, ensuring that all income and property of the company shall never be distributed amongst the members, but used to further the aims of the company. In the main, Guarantee Companies are formed by professional bodies, trading organisations, clubs, educational establishments and charities.

If the Company will be seeking charitable status, it is recommended that this is done after incorporation - this will save considerable delay in the Incorporation.

LIMITED LIABILITY PARTNERSHIP

An LLP is similar in some ways to a standard Partnership, except that the individual members have lower liabilities to any debts which may arise from running the business.

There are more administrative duties involved, compared to the Partnership business structure.  In fact, an LLP is more similar to operating a Limited Company.

In terms of liability, the Limited Liability Partnership is itself liable for debts run up in running the business, rather that the individual members of the LLP.  As a result, LLP's are only recommended for profit running businesses.

Individuals or existing businesses can be members of a Limited Liability Partnership, and the LLP must have at least 2 members.  The rights and responsibilities of all members would usually be laid out in a "Deed of Partnership".

The LLP would typically select a "Designated Member" (or members) who would be responsible for maintaining communications with Companies House, preparing accounts and acting for the LLP if for some reason it is dissolved further down the line.

An LLP should draw up a "Deed of Partnership" at the time of formation - a legally binding agreement between members which lays out the rights and responsibilities of each party to the agreement.  Alongside administrative details such as the names and addresses of members, the deed will also include details on the amount of capital each partner will inject into the business, what their individual roles and responsibilities will be in running the business and what would happen if a partner leaves the business.

FLAT MANAGEMENT COMPANIES

A flat management company has its Memorandum and Articles of Association specially drawn up to allow the company to own, manage and administer a freehold property, which is normally divided into several dwelling units or flats, with each leaseholder owning a share in the company The leaseholder will be obliged to transfer the ownership of the share to the new leaseholder when disposing of the property.