What is an LTD Company UK?

What is an LTD Company in the United Kingdom?

A UK LTD company is a business structure that is legally and financially separate from the person or people who run it (i.e. directors and shareholders). This means that if the company runs into financial difficulties or is sued, the individual(s) in charge have limited liability (sole traders are wholly liable). The directors and shareholders are only liable for the amount they have invested as long as there is no wrongdoing on their part. Personal assets, such as real estate, are not at risk.

Aside from limited liability, a limited company has several advantages over a sole trader. This includes tax efficiency, ease of company formation, and brand protection.

Please watch the video given below to get more details:

Here are the different types of a limited company:

1. Private company limited by shares (the most common legal structure)
   
2. Private company limited by guarantee
   
3. Public limited company
   
4. Limited liability partnership

Private company limited by shares:

1. A separate legal entity from the people who run and own the company.
   
2. Shareholders own shares in the company.
   
3. Personal and corporate finances are kept separate, and owners are financially secure because their liability is limited.
   
4. Profits can be retained after tax, making it the most popular option for UK business owners.
   
5. It needs only one person to set up and run.
   

Private company limited by guarantee:

1. A separate legal entity from the people who run and own the company.
   
2. The company does not have shareholders and shares it has guarantors and a guaranteed amount.
   
3. Personal and company finances are separate, and owners are protected financially as their liability is limited.
   
4. Profits should be reinvested into the business - it is suitable for charities and other not-for-profit organisations.
   
5. It needs only one person to set up and run.
   

Public limited company:

1. A separate legal entity from the people who run and own the company.
2. The company has shares that are held by shareholders.
   
3. Personal and company finances are separate, owners are protected financially as their liability is limited.
   
4. Shares can be made available to the public via the stock exchange (this element adds several extra-legal requirements).
   
5. Dividend payouts to shareholders are generally determined by the board of directors.
   
6. It needs three people to set up and run.
   

Limited liability partnership:

1. A separate legal entity from the people who run and own the company.
   
2. The company does not have shares, instead, it has partners (also known as members) who are equally liable.
   
3. Personal and company finances are separate, owners are protected financially as their liability is limited.
   
4. Profits can be kept after paying tax.
   
5. It needs two people to set up and run.

Also read: What are the requirements for UK Company Formation?

How to set up a UK limited company?

Different types of limited companies require different information for company formation. In general, you'll need a separate company name (RTRSupports Limited provides a free company name check), a registered office address, and personal information for each individual in the company (including proof of ID and address).

Companies can be formed directly with Companies House (the UK company registrar) or through a company formation agent, such as RTRSupports Limited. A company formation agent can provide services that Companies House cannot, such as

1. A registered office service to keep your home address off the public register.
   
2. An introduction to a business bank account provider and other relevant partners such as business loan providers and accountants.
   
3. Help with company filing requirements such as annual accounts and confirmation statements.

Also, a company can be formed online in as little as 24 working hours after the necessary information has been provided.