Limited Company: Definition & Companies House Registration

The company that has limited liability is one of the most common types of building businesses in the UK, as it gives legal benefits to the business owners. Business types that you want your own business to operate in are definitely one of the initial factors to decide when you have made up your mind to establish and run your own business. These are not the goods or services you plan to manufacture or offer but rather the regulations under which the business works- legal business structure.

The UK has many kinds of businesses, but the two commonly operated are the sole trader and the limited company.Being a trader in the UK, it is not compulsory to set up the limited company; still, many sole traders are earning fair income on success in business operations. 

If you want to be an individual trader in the United Kingdom, you need not register a business with Companies House, but this doesn’t mean you will be free ever after from a number of legal requirements. This guide, therefore, takes you through everything you need to do in order to form and run your business successfully.

What is a Limited Company?

Limited companies are one of the types of businesses that are independent of its owners or directors concerning the law. This separates and gives identity to finances, duties, and legality. Its important benefit is limited liability; thus, no liquidation of shares involves selling personal property of the owners or shareholders to pay off debts of the failed business.

There are one basic forms of limited companies, which include:

Private Limited Company : This does not offer shares to the public, a feature largely favored by small and medium enterprises alike. 

Benefits of a Limited Company

Four benefits of a limited company are given below:

1. Limited liabilities: Shareholders liability is limited to what they invest in the company.
2. Professional Credibility: Most of the businesses that are automatically limited company registered seem very professional.
3. Tax Efficient Incorporation:The tax rates on profits or income earned by corporations are usually more preferable than personal income tax.
4. Separate Legal Entity:The company can enter into contracts, possess properties, and carry on businesses without interference from or management of its owners.

How to Register a Limited Company With Companies House

This is actually a very straightforward process to set up a limited company in the UK. Company formation can be quick and hassle free if you have the proper guidance. It is practically done through online means with the registration of companies at Companies House.

1. Choose a Company Name:Your business name has to be specific and must not contradict the guidelines of Companies House. Before that, check for availability on the Companies House website.
2. Decide on Directors and Shareholders:At least one director must be appointed for the management of a company. Shareholders can either be individuals or corporate.
3.  Prepare Key Documents:You will have to submit:

Memorandum of Association:Intent of company formation.

Articles of Association : Rules governing the company according to the shareholders.

4.  Register With Companies House:Register your company:

Online-12; usually done within 24 hours.

By post-£40 and then it takes up to 10 days.

By using an agent or accountant as your intermediary.

5. Obtain a Unique Taxpayer Reference :The Unique Taxpayer Reference which would empower you to install business taxes would be issued once again by the HMRC for registration.

What is a Limited Liability Company?

In reality, LLC is more beneficial than the alternative financial entity because of the multiple hosting benefits that all LLCs afford.It is usually used in the United States and in other countries as well; however, it is different from the Ltd structure in the UK.

1. Limited Liabilities :The owners are not under any personal liability for the debts of the business.
2. Pass-Through Taxation :The profits and losses of the business pass through to the members and no double taxation levied.
3. Flexibility in Management: Management may be either members or appointed managers.

4. Fewer Compliance Requirements : Less paperwork-for example, complaint with the corporation.

 How Is an LLC Different from an Ltd?

An LLC is a type of pass through taxation and having flexible operation in the US. Ltd is basically a separate legal entity resembling a corporation for tax purposes in the UK.

What is a company limited by guarantee?

A company by guarantee is one type of limited company typically used by non-profit organisations, charities, clubs, and associations. The company does not have shareholders, as it has no share capital in the sense of a share-limited company. Instead, it has guarantors who agree to pay a certain amount in the event of the company going into liquidation.

Key Features of a Limited Company by Guarantee:

Four Key Features of a Limited Company are:

1. No Shareholders, Only Guarantors: Members would act as their own financial guarantors rather than having owners or shareholder interests. 
2. Limited Liability:The Guarantors hold their liability to the amount they agreed and signed up to pay.
3. Reinvestment of Profits:Profits are generally retained within company activities, thus made available for reinvestment instead of distribution. 
4. Used for Nonprofits & Charities:As stated, it is typical of social enterprises and often seen in sports clubs and charities.

Examples of Companies Limited by Guarantee

Three main examples of limited company are:

1. Charities & Non-Profits:In the UK, most charities register as a CLG to shield their trustees from personal liability. 
2. Membership Organisations:Some examples are trade associations or sports clubs. 
3. Community Interest Companies :Some social enterprises have also been established under this structure.

Conclusion

Limited companies in the UK are among the most prominent types of business structures due to the advantages they confer: limited liability, tax efficiency, and an aura of professionalism and credibility. This means that, depending on how he chooses to incorporate his limited company whether Ltd, PLC, or CLG registering at Companies House will be almost instantaneous and affords the opportunity for the business to be legally recognised.