UK Law and Practice Contributed by: Paolo Palmigiano, Rachael Roberts, Helen Farr, Debbie Heywood and Louise Popple, Taylor Wessing LLP
There are also other corporate vehicles, such as companies limited by guarantee, unincorporated associations and charitable incorporated organi - sations, but these are seen less frequently. Private Limited Companies A private limited company in England is typically governed by one or more directors and oper - ates in accordance with its Articles of Associa - tion, as prescribed by the Companies Act 2006. The liability of shareholders is limited, meaning that their financial responsibility for company debts does not exceed the unpaid amount on their shares. A private limited company does not have a minimum share capital requirement, though it must always have at least one share in issue, and there must always be at least one shareholder. These companies are best suited to small and medium-sized enterprises (SMEs), and are particularly appropriate for family busi - nesses, start-ups and ventures seeking to keep their affairs private from public scrutiny. Public Limited Companies A PLC in England is also governed by the Com - panies Act 2006 but is subject to an additional regulatory framework, which includes the UK Corporate Governance Code, the Listing Rules and the Market Abuse Regulations. The majority of PLCs are listed on a stock exchange, typi - cally the London Stock Exchange or the Alter - native Investment Market. A PLC must appoint at least two directors and a qualified company secretary. It is managed by a board of directors and is subject to more stringent regulations than a private limited company. A PLC must have a minimum of two shareholders, and sharehold- ers’ liability is limited to the amount that remains unpaid on the shares they hold. The minimum share capital threshold for a PLC is GBP50,000, with at least 25% of that amount being paid up upon incorporation. This type of entity is suitable
for larger ventures looking to attract investment from public markets – being able to raise capital through equity offerings and sell shares to the public offers substantial opportunities for growth and expansion, making it an attractive option for businesses with ambitious scaling plans. Often, companies will start out as private companies limited by shares and eventually become PLCs, most commonly as a result of either an initial public offering or by being acquired by a public company. Limited Liability Partnerships An LLP is a type of corporate vehicle that merges the flexibility of a partnership with the benefits of limited liability for its members. The governance structure of an LLP is administered directly by its partners, usually pursuant to an LLP agreement, which sets out each partner’s responsibilities, obligations and share of prof - its. Unlike traditional companies, LLPs are not required to hold annual general meetings or file their accounts. Members of an LLP enjoy limited liability protection – their personal exposure for the debts incurred by the LLP does not extend beyond their individual investments into the partnership unless they engage in wrongdoing or personal negligence. There are no statutory rules regarding minimum capital contributions in an LLP, but an LLP must always have at least two members. In England, LLPs are particularly favoured by professional services firms, includ - ing law practices and accountants. 3.2 Incorporation Process The steps and timing for incorporation of enti - ties in the UK depend on the type of entity that has been chosen. All private limited companies, PLCs and LLPs must be registered at Compa - nies House, England’s registrar of companies, which operates under the Companies Act 2006. Online registration with Companies House is
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