Limited companies exist in their own right as unique legal identities. This means the company's finances are distinct from the personal finances of their owners.
Marriots aim to help owners and managers of companies achieve their business objectives and maximise the shareholders wealth. We have many years experience of helping our clients form companies and adjust them as the business develops
Shareholders may be individuals or other companies. They are not responsible for the company's debts unless they have given guarantees (of a bank loan, for example). However, they may lose the money they have invested in the company if it fails. The main types are:
-
Private limited companies can have one or more members, eg shareholders. They cannot offer shares to the public.
-
Public limited companies (plcs) must have at least two shareholders and can offer shares to the public. A plc must have issued shares to a value of at least £50,000 before it can trade. View the guide to company formation at the Companies House website.
-
Private unlimited companies - these are rare and usually created for specific reasons. Good legal advice is needed.
Companies must be registered (incorporated) at Companies House. They must have at least one director (two if it's a plc) and a company secretary, who may also be shareholders. In a plc, the company secretary must be professionally qualified. From October 2008, it will no longer be necessary for private limited companies to have a company secretary.
A director or board of directors make the management decisions.
Finance comes from shareholders, borrowing and retained profits.
Public limited companies can raise money by selling shares on the stock market, but private limited companies cannot.
Accounts are filed with Companies House.A "shuttle" annual return (form 363s ) will be sent before the anniversary of incorporation each year. It needs checking, amending and returning to Companies House with the appropriate fee. The directors and secretary are responsible for notifying Companies House of changes in the structure and management of the business.
Profits are usually distributed to shareholders in the form of dividends, apart from profits retained in the business as working capital. Companies pay corporation tax and must make an annual return to HM Revenue & Customs (HMRC). Company directors are employees of the company and must pay Class 1 National Insurance contributions as well as income tax on their salaries. If your company or organisation has any taxable income or profits, you must tell HMRC that your company exists and that it is liable to tax.
Shareholders are not personally responsible for the company's debts, but directors may be asked to give personal guarantees of loans to the company.
To learn more about forming and running a company to manage your business call Marriotts on 01277 236200 or email info@marriottsasociates.com
|
