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A limited company is one of the three business structures used in the UK. The business structure allows an individual to create a business as a separate entity. It allows the owner to and any other shareholder to only risk their investment and keep their personal finances protected. Therefore, its popular way to set up a business as it offers protection should the business fail. Any business debts will only have to be paid by the business, not the owner or the shareholders. Whereas a sole trader and the owner are seen as one entity in the eyes of the law, meaning that the owner is responsible for any business debts and failures.
Limited companies are the most common form of incorporation at Companies House. We guess they account for over 90% of all business started in the UK. They are suitable for Medium, Small and Micro businesses. They can be set up online and without the need for paperwork or signatures. Only one person is required for a company to be set up as long as that person acts both as director and shareholder. A limited company can have corporate shareholders and directors but there must be at least one natural person acting as a director. Your limited company (Ltd) will be formed and ready to trade within 1 working day (24hrs), subject to the work load of Companies House.
Limited By Guarantee Companies are generally used by “not for profit” organisations such as clubs, associations, public interest groups and charities. They can be set up online and without the need for paperwork or signatures. Only one person is required for a guarantee company to be set up as long as that person acts both as director and guarantor. A company limited by guarantee does not have shareholders it has members. Each member has an equal vote and guarantees the same amount, usually £1. There are no shareholders who own the company and no means to distribute a profit by way of a dividend. Your limited by guarantee company (LBG) will be formed and ready to trade within 1 working day (24hrs), subject to the work load of Companies House.
Limited Liability Partnerships tend to be used by large professional partnerships such as accountants, solicitors, engineering companies and surveyors. They do not require articles of association. They can be set up online and without the need for paperwork or signatures. There must be at least two “designated” partners (also known as members) to form an LLP. Designated partners perform statutory functions such as filing documents with Companies House. In some Partnership Agreements where there are a small number of members it is not uncommon for all members to be designated members. There can be more (the Companies Acts do not provide for a maximum number) but they need not be designated.