Understanding the Limited Company Structure in the UK

The UK is being seen as one of the best countries to do business in. The pound and the euro are two of the strongest currencies in the world. That and many other business benefits draw people to form companies in the UK.

The company formations that exist in the UK are ready made companies, flat management companies, limited companies, limited liability companies etc. Out of all the company formations UK limited company formations are one of the most popular.

There are two types of UK limited companies formations – private limited companies and public limited companies. There are only a few differences between the two. But it is important that these differences are understood, to start and register a new limited company. Private limited companies require registration with the Registrar of Companies at Companies House. Such a company has members (or shareholders).Their personal assets are protected if the company closes or falls into debt. This is called a limited liability. The shareholders therefore enjoy this protection and they can only lose what they have put into their business.

The management of a private limited company is in the hands of the board of directors. Each and every director is personally responsible for the management of the company. They should also act in the limited company's best interests. The limited company is a legal entity in its own right. Through the PAYE tax system the directors are employed by the company. It can be sold, and it can also buy shares of other companies. It has 'perpetual existence'.

The capital is raised by the selling shares, but not to the general public. The shareholders receive the dividends as profits.

A UK ltd company formation that is public in nature is very similar. The important difference between a public and private company is that a public company can offer to sell its shares to the public.

Before a public limited company commences business or borrows money, the company must satisfy Companies House by showing that a minimum of £50,000 worth of shares have been issued. Also, that each share has been paid up to a fourth of its face value. This being done, the company is allowed by the house to start business.

Because of the benefits of liability and taxation UK ltd companies formation is becoming very popular with formation agents. These agents know the business of forming limited companies in and out. And their vast experience and expertise can save costs, time and unnecessary delays – Like escaping appointment with banks and enormous amounts of paperwork to open a bank account; or taking out additional time to be well versed in regulations and laws (because limited companies come with many regulations.)

A UK limited company formation agent does all this for its clients through a tailor made electronic package. Like the three value for money packages offered at companyformations247.co.uk. At their website you also learn about a great number of additional services and of other things that make the job of company formation really easy.