What Is A Limited Company?
Ltd companies exist in their own right. They are independent legal entities. This means that the company’s finances are separate from the personal finances of their owners.
Shareholders may be individuals or other companies. They are not responsible for the company’s debts unless they have given guarantees – for example, a bank loan. However, they may lose the money they have invested in the company if it fails.
The 3 primary sorts of Ltd companies. Private limited companies are made up of one or more members or shareowners. They cannot offer up stocks to the public. Nearly all small companies are private limited companies. Public limited companies, called PLCs must have at least a couple of shareowners and must have issued shares to the public to an economic value of at least 50,000 in advance of when it can trade. The 3rd kind, private unlimited companies are uncommon and are usually created for limited reasons.
Setting up an Ltd company is comparatively uncomplicated. First off, you must register at Companies House. It is important to name your directors, one for a private limited company and at least 2 for a PLC. Those directors may also be shareowners. Directors have to be aged 16 or more. One of the directors needs to be a private person as opposed to a company. PLCs must have a qualified company secretary whose details have to be recorded at Companies House. Directors are in charge of notifying Companies House for any modifications to the company’s directors or company secretary.
Limited Companies can raise money via their shareowners, business loans or their gains. Plcs can raise cash by trading their stock on the stock market. Earnings are shared with shareowners as a dividend, although a lot of that net income is kept within the business to give it working capital.
All limited companies must file accounts with Companies House. Their accounts have to be audited on a yearly basis, although some companies are exempt from this requirement. It is vital that the instructions Companies House give you for filing your accounts are followed to the letter. If the company makes a profit or has any taxable income, they must notify HMRC of that profit and pay Corporation tax. The will have to file a tax return on a yearly basis. Having a good accountant is essential for a Ltd company to ensure that they fulfil all their obligations.
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