Limited company

A limited company is the most common form of business. A limited company is a legal entity that is separate from shareholders and directors. The shareholders are not liable for the company's debts beyond the amount remaining unpaid on the shares they hold or guaranteed to a third party. To register a firm as a limited company (to incorporate a company) certain documents must be submitted to the Registrar of Companies who then issues a Certificate of Incorporation. This certificate permits the company to start its operations. A limited company is managed by the Board of Directors elected at annual shareholders' meetings.

As a rule, the accounts of a limited company have to be audited by registered auditors. A limited company must submit a set of audited accounts to the Registrar of Companies each year. This set should include the directors' report, the auditors' report, profit and loss accounts, the balance sheet, the statement of cash flow and explanatory notes to the figures in the accounts. In addition, it is required to file an annual return giving details on the directors and shareholders as well as some other statutory information. All information on file at the Companies' Registry is open to public inspection.

Limited companies are classified as private limited by shares, private limited by guarantee and public limited. In a private company limited by shares, members' liability is limited to the amount unpaid on shares they hold. If a company is limited by guarantee, its members’ liability is limited to the amount they have agreed to contribute to the company's assets in case of its winding up. A public limited company’s (PLC) shares may be offered for sale to the general public and members' liability is limited to the amount unpaid on shares held by them. The shares of a PLC can be transferred without the shareholders' permission. A private limited company (Ltd.) is prohibited by the Companies Act (Part III, Ch. 1) from advertising its shares for sale. Its shares may only be transferred with the agreement of all shareholders. A PLC is also required to issue shares in the amount of J50.000 minimum (Section 118 of the Companies Act) and to have at least two people as the company owners (Subsection 1 (1) of the Company Act). A

Private company may have even one owner (Subsection 1 (ЗА) the Company Act).

Here are some examples of well-known companies that г registered in the UK as Ltd. or PLC.

Private limited companies:

Du Pont, Henkel, Rhone Poulenc Chemicals, Shell, Kraft Fooc McDonalds, Nestle, Procter & Gamble.

Public limited companies:

British Airways, Marks & Spencer, Smithkline Beecham, Unilevt

There is no apparent preference as to which form (Ltd. or PLC applies more to this or that sector of the British economy. Ft instance, of the Big 5 accounting firms, Deloitte & Touche an PriceWaterhouseCoopers are Ltd, KPMG is PLC, Arthur Anderse is a private unlimited company and, finally, Ernst & Young is partnership. As to the national origin of the companies, larg multinationals originating from abroad tend to be registered a private limited in the UK, whereas large British companies an predominantly private limited.