The main features and setting up requirements of Private Limited Company are explained in the overview below.
Advantages
Although private limited companies are more complex than Sole Trader or Partnership, there are several reasons for establishing a private limited company:
– Limited liability
– Flexible borrowing powers
– Ownership of property
– Carrying on of the company despite the resignation or bankruptcy of individuals
– Identification of the interests and obligations of management
– More confidence to third parties – Addition of new shareholders and investors
Company Limited By Shares
Shareholders liability is limited to the amount unpaid on shares they hold. A company limited by shares are usually set up for commercial purposes.
Company Limited by Guarantee
Members’ liability is limited to the amount they have agreed to contribute to the company’s assets if it is wound up. A company limited by guarantee has no share capital and is usually incorporated for non-profit making purposes; usually clubs, or professional, research and trade associations like the Turkish British Chamber of Commerce and Industry. These companies have members, rather than shareholders.
Company Name
The company is identified with this name. You will have to be careful about choosing your company name. All limited company names must end with the word “Limited†or “Ltd†or “ltdâ€.
The company name must not be offensive. It must not be the same as or very similar to names already registered and should not include any sensitive words or expressions.
You can check if a name is already registered onCompany Name Check . For the complete list of rules for company names, you can call Companies House on 0870 333 3636 or visit their web site at
http://www.companieshouse.gov.uk/
about/gbhtml/gbf2.shtml
Business Name
This is the name used for carrying on business. The Business Name can be different from the registered company name. Although business names are not registered with any government department, there are regulations on business name use. For details, you can visit the Companies House web site page at
http://www.companieshouse.gov.uk/
about/gbhtml/gbf3.shtml#one
Directors
A private limited company must have at least one director. The directors are people appointed by the members or shareholders to run the company on their behalf. A director can be any person age 18 or over except if an undischarged bankrupt, the company’s auditor or the subject of a disqualification order by a court.
Shareholders (or Members) of a Private Limited Company
One or more persons can form a company for any lawful purpose; the person can be an individual or a company.
In contrast with the Sole Trader, the owners (Shareholders) liability is limited for Limited Companies. Shareholders may be individuals or other companies. The Limited Company is a legal entity independent of the owners, and the finances of the shareholders are separated from their personal finances.
Private Limited Companies cannot offer shares to the public through the stock exchange.
Officers of the Company
The officers of the company are the people appointed by the company members to run it on their behalf. Companies must have officers in place at all times, and their names and addresses must be on the company’s registration documents. A private limited company must have at least one director and one secretary. The officers of a private limited company usually are the Chairman, Vice Chairman, Secretary (Company Secretary), Treasurer (Financial Officer) and CEO (General Manager).
Secretary (Company Secretary)
Every company must have a secretary. A director can also be the secretary provided there is more than one director. Main responsibilities of the Company secretary are the maintaining the registers of members, directors and secretaries and directors’ interests, filing statutory forms with the Companies House, notifying members and auditors about meetings and keeping of minutes of directors’ meetings and general meetings.