Private Company Limited (LTD) by Shares

Why should I form a Private Company Limited?

It is very simple to open a private company limited by shares and any individual can do it. There is less risk in incorporating a private company limited as owner enjoys the benefit of limited financial liability. Following points below not only help you in setting up your private company limited but also help in maintaining your business after company formation –

• Every private company limited must be legally registered with company’s house in UK. You must decide a unique name for your company in order to get name approval from company’s house.
• You must have a registered office address which should appear on the public records. PO Box number is not allowed. The full physical address shared with the companys house should be of the same country in which the company is registered.
• Minimum one director is required to incorporate a private company limited by shares. Director & shareholder can be the same person.
• The application form must contain details of people with significant control (PSC’s) as in most of the companies; shareholders & directors are the PSC’s.
• You need to complete Memorandum of association to state the objectives, mission, vision and names of first shareholder’s.
• You also need to complete Articles of association to state the rules & regulations of the company, its members & the officers.

Benefits of Private company limited by Shares

The benefits of Private Company limited are as follows –

1. It protects the personal finances of the shareholder and only responsible for company debts up to the value of their shares.
2. It improves your professional image and business profile as it gives impression of established, well organized and reputable business.
3. Any other company can become a shareholder or director in a company limited but minimum one director should be individual (human)
4. After doing name registration, NO LLP or a company limited can use the same name or similar name to your company.
5. It is a separate legal entity from its members and enjoys the benefit of perpetual succession. It means that company will not be affected by the death of any of its members and continue to exist.
6. You can also sell shares of your company in order to raise additional capital or to grow your business.
7. You can easily do strategic financial planning subject to tax. Profits can be easily distributed by way of salary & dividends which makes it a very tax effective structure.