I remember sitting in a lecture hall during one of my second year management courses where they told us the different types of company and what makes them different. Like most of those courses, it went mostly in one ear and out the other. I’m paying the price for that at the moment as I’m making up for what I didn’t learn then and looking at the Companies House website. I’m not filling out the forms on my own, I’ll get the lawyers to help with that. It’s apparently only £20 to submit yourself but there’s a lot of legal jargon to deal with.
Basically in the UK there are 4 main types of for profit company (not including sole proprietor or partnership):
- Private company limited by shares – this is the most common type of company. The important difference from a public limited company is that a private company may not offer its shares for sale to the general public.
- Private company limited by guarantee – members of this type of company do not make any contribution to the capital during its lifetime as they do not purchase shares. The members’ liability is limited to the amount that they each agree to contribute to the company’s assets if it is wound up.
- Private unlimited company – this type of company may or may not have a share capital and there is no limit to the members’ liability. Because there is no limitation on members’ liability, far less of the company’s affairs have to be disclosed publicly than is the case with the other types of company.
- Public limited company – this type of company has a share capital and, the liability of each member is limited to the amount unpaid on shares that a member holds. The important difference from a private is that a public limited company may offer its shares for sale to the general public. It may also be quoted on the stock exchange.
I’ll probably go for Ltd by shares. I can’t but feel a little out of my depth.
I also discovered whilst reading the Companies House website that “Every company must paint or affix its name on the outside of every office or place in which its business is carried on – even if it is a director’s home. The name must be kept painted or affixed and it must be both conspicuous and legible.” I don’t like the idea of attaching a bronze plaque to the fornt of my parents house.