Different Types of Company In the United Kingdom
It all boils down to the company you keep. Especially when you’re a business owner. From multinationals to sole proprietorships, let’s talk about some of the different types of companies in the United Kingdom.
Why the United Kingdom?
First, let’s discuss why we chose the UK to set up a business. For several reasons. One, the UK has a diverse business landscape, and opportunity comes with that. Entrepreneurs have so many options to choose from in terms of structuring their business ventures.
Being established for as long as it has, the UK is well equipped to accommodate various business models. It has a strong economy, it is renowned, and its economy is dynamic, stable, resilient, and innovative. London is one of the most well-known global financial hubs. Companies worldwide come to establish a base here because they gain access to key European markets.
Another reason to start a business in the UK is the access to different trade agreements that you will gain. With trade agreements secured with numerous countries, cross-border trade and investment is easy in the UK. The UK has a conducive business environment. With transparent legal frameworks in place and favourable regulations, the UK is one of the top business destinations for an aspiring investor.
What Are the Different Types of Company In the UK
The good news about being diverse is the type of company options available to you are not limited. Here are some options that you might consider:
Limited Liability Companies (Ltd)
Where types of a company are concerned, Ltd’s are one of the most popular business structures. Why? Because owners get limited liability protection and this legal entity is separate from the business owners. As a shareholder in the company, you can sleep easy knowing you are not personally liable for the company’s debts beyond what you invested.
A Private Limited Company is secure and flexible. Both individuals or companies can be the owner of an Ltd. Even a combination of both can be the owner of an Ltd. As a legal entity, though, you will be subject to corporate tax rates. You must also meet all the regulatory and compliance requirements, and annual and financial reporting. 3E Accounting can make light work of this aspect for you.
Public Limited Company (PLC)
PLC is the type of company for larger corporates. It is one of those listed on the stock exchange. This means that you can raise capital shares by selling your company’s shares to the public. Larger firms love this option because it suits their ambitious business plans well.
As a PLC, you will be subject to regulatory rules that are more stringent. You must also disclose your financial information to the public and shareholders because you will be listed on the stock exchange.
A Sole Proprietorship
As far as company types go, a sole proprietorship (or sole trader) is one the easiest options you can go for. Individuals and small business owners love the sole proprietorship options because they get to run it as an independent entity. They have full control over every business decision that happens. All the profits go straight into their pocket. The only drawback with this option is that being a sole proprietor means you will assume all the business responsibilities. This includes the liabilities, debts, and legal obligations.
Partnership Company
A partnership is one of the different types of companies you can establish in the UK. If two or more people are intending to set up a business, this could be the collaborative company types you are looking for. A Partnership Company business entity has several categories under its belt. Limited Liability Partnerships (LLPs), limited partnerships, and general partnerships. In the latter, all business partners have equal responsibility and liability for the business’s obligations and debts.
Limited partnerships have two partnership categories to them, which are general partners and limited partners. General partners who manage the business will have unlimited liability, and limited partners help contribute to the capital, but they have limited liability. As far as the different types of company goes, LLPs are the best in this option because LLPs are a hybrid. Partners get limited liability while getting the freedom to partake in the managing of the business.
Community Interest Companies (CIC) and Charitable Incorporated Organisations (CIO)
A CIC caters to social organisations whose objectives are community-focused. The CIC’s operations are traditional, but they must reinvest their profits into the community or a specific social cause that the organisation supports. This is one such different type of company you can consider incorporating in the UK.
A CIO is specifically set up for charitable purposes, and they are a separate legal entity, which means trustees are protected from personal liability. CIC companies are regulated in the UK by the Charity Commission and, thus, are required to comply with their reporting requirements. Charity organisations love this structure because it has more flexibility and limited liability protection.
Get Incorporated with 3E Accounting
No matter which one of the different types of company you pick, 3E Accounting is here to help. With the right accounting firm in the UK by your side, your business will go much further than you ever thought possible. Should you wish to discuss our services further or explore your options, get in touch with our 3E Accounting team.
