What is a Limited Company UK: The Structure and Types

  • Post By admin
  • Jun 1, 2021

A Limited Company, UK is the first choice for the business owners planning to open a branch offshore. The reasons why one must give opening a Limited Company, UK a thought is simple. There are several benefits of it.

However, before opening a Limited Company, UK, you must know what it is and how it operates. Now, one thing is common – shareholders are the key. And, this business structure is a proven method of generating profit. But you can’t begin a journey without knowing about it.

Therefore, read along this blog to know about the Limited Company, UK.

The Structure of Limited Company UK: The Basics

A Limited Company, UK is considered to be its own legal entity. Regarding the owner or shareholder of a Limited Company, it can have one or more. There’s no limitation in this. And, the owner or shareholders can buy in through private sales.

Now, among the employees, there has to be at least one director. And, it is the director who performs all the administrative tasks including the tax filing. In this regard, for a Limited Company, UK, the owners are taxed separately as the company’s finances are discrete than the owners’.

Therefore, the company is distinctly responsible for its profits and taxes. And, the shareholders get a part of the profit while the rest remains as the working capital of the company. The director(s) can withdraw funds. However, only for paying salary or for paying the EMI of the loans taken by the company.

So, these are the basics of a Limited Company, UK Structure. Now, there are different types of Limited Companies. Let’s get into those.

Types of Limited Companies

The structure of limited companies is similar around the world. They are codified across multiple countries in accordance with their governing laws to easily identify organizations with ease. 

The two of the most common types of companies are private limited and public limited.

Private limited companies are not permitted to offer shares to raise capital, unlike public limited companies. Hence, private limited structures are the most common among smaller and growing businesses. Whereas a public limited company is more commonly a large enterprise handling a huge workforce.

In the USA, the naming/coding is different from that of Europe and Asia. Limited companies are referred to as Corporations (Corp.) or Incorporated (Inc). While some American states do allow using limited as a suffix but it majorly has no significant difference. Similarly in Germany, the coding is also different – public limited companies are coded as Aktiengesellschaft (AG) and private limited companies that cannot issue shares as GmbH.

Create your Limited Company UK with Activate Global

Activate Global offers streamlined company formation packages. So, if you are a business owner planning to spread your branches offshore, Limited Company, UK is the best option, to begin with. And, if you need a companion to guide you through the journey, then Activate Global is here. Give us a call to more know more about the packages.

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