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Choose A Legal Structure For Your Business7
Choose A Legal Structure For Your Business7
sole trader
business partnership
limited company
limited partnership
limited liability partnership (LLP)
Tell HM Revenue and Customs (HMRC)
If you want to close down your existing business structure, follow the
usual steps.
To no longer be a sole trader
Youll need to:
landlord retaining this interest, the simplest legal device is for a company to be set up to own the
freehold of the property, and for each owner of a flat to have an interest in the company.
Most property management companies are private companies limited by shares with appropriate
articles of association, though some are limited by guarantee.
Some property management companies will do no more than hold the title to property and so can
be considered asdormant companies under the Companies Acts, allowing pro forma dormant
company accounts to be registered atCompanies House. This helps keep administration costs to
a minimum and is useful where where the property is small with little or no routine maintenance
which can be arranged between the owners of the flats without involving the company.
For more advice on the practical aspects of forming a property management company and
running it once registered, go to the Incorporation Services Limited website.
Unlimited companies
Many people refer to a sole trader's business or a partnership as an unlimited company, but such
businesses are not in fact companies. It is possible to register at Companies House a private
company which is unlimited, that is the members accept complete liability for the company's
debts. If the company needs money to pay its debts a call can be made on each of the
shareholders to contribute a fixed amount on each share held by them.
An unlimited company has all the other features of a private company limited by shares. It is
registered at Companies House, has members (usually shareholders), directors, articles, etc. Its
one major advantage is that it is not required to register annual accounts at Companies House.
This type of company is suitable for a business where the risk of insolvency is very low or nonexistent, or where it is important not to put the company's accounts on the public register at
Companies House. There are few unlimited companies, but this may be because their existence
Organisations (CIOs) were brought into being by the Charities Act 2006. Detailed regulations are
in the Charitable Incorporated Organisations (General) Regulations 2012 SI 3012. It became
possible to submit applications for registration from 10th. December 2012 in England and 1st.
April 2011. CIOs are designed to be a more efficient way to register an incorporated charity. Until
CIOs became available a charity that wished to be incorporated (and so have limited liability) had
to register as both a company limited by guarantee and as a charity. Using a CIO should be
simpler to incorporate and run as it will be registered with just one body (the Charity
Commission) and will only have to submit one annual return and one set of accounts per
year. Further details are on the Charity Commission's CIO Page for CIOs in England and Wales
and from the Office of the Scottish Charity Regulator for CIOs in Scotland. Community
Companies CIC offers a full package of services for CIOs, from first registration to secretarial and
other drafting work.
TYPES OF COMPANY
The following gives a brief guide to the various types of companies that can be incorporated in the UK and
their various principal characteristics. More detailed information can be found under each separate heading
within this section and in the customer support section. Use this list and the links provided to help decide
which company formation you need.
The types of company we can incorporate for customers include:
Objects unrestricted
Limited companies are often advantageous for their shareholders regarding taxation
Takes longer to complete registration of new directors and transfer shares to new owners
More expensive
A Guarantee company is not owned by its members and cannot be transferred by its members for
value it has no share capital
Some input required from client to establish main objects if required or objects can be unrestricted
A private company can be converted to a PLC, so most PLCs start life as normal private companies and
convert at a later date prior to flotation of the stock markets
Suitable for new and existing partnerships wishing to obtain limited liability status, and aimed
particularly at professional partnerships such as accountancy and solicitors firms
Beneficial for property developers planning to sell flats or apartments in a development once
completed
Can be used to spread the freehold of a number of flats across the individual owners allowing easy
transfer and sale of each flat
Can be used purely as a vehicle to manage the maintenance of a property comprising of several flats
or apartments
Allows leaseholders to purchase freehold properties or acquire the rights to manage a property under
the Commonhold and Leasehold Reform Act 2002
Intended for use by social enterprises who wish to utilise their profits and assets for public benefit