Some facts about Limited Companies

What is a Limited Company?

A company is recognised as a legal entity, separate from the person or persons who formed the company and/or the directors and shareholders i.e. it has a separate legal existence and the officers (company secretary and directors) are employed by it.

The Companies Act 1985 and subsequent legislation declares that a private limited company can be formed for any lawful reason by one or more persons with one subscriber (or shareholder) to the Memorandum of Association.

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A private UK limited company is considered as one of the most easily managed and cost effective business structures.

  1. No specific qualification requirement for company director, secretary or shareholder.
  2. No nationality or residence restrictions for company director, secretary or shareholder.
  3. A private limited company can just have one director who may also be the only share holder.
  4. A private limited company can start trading immediately upon incorporation. It does not require any trading certificate to start its business.


  1. A private limited company has a separate legal existence. This means that assets will be owned by the company itself and all contracts would be signed on its behalf. The directors and secretary can only act as agents. Therefore the company is not dissolved on the resignation, bankruptcy or death of a director. The company can be dissolved only by winding up, liquidation or order of the Registrar of Companies or by the Court.
  2. Limited liability is another advantage of a private limited company.
    The shareholder's liability is limited to the value of the shares held by them should things go wrong. The personal assets of a shareholder cannot be used to pay off the debts.
  3. Incorporation as a limited company will protect the selected company name. Once incorporated, it is listed in the register of companies maintained by Companies House. Therefore no one else can incorporate using this name.
  4. Tax benefits are also applicable. The directors of the company are required to pay income tax but the company pays corporation tax on company profits which is one rate of tax only and averages out at much less than if income tax were paid on the profits.
  5. A private limited company has a structured procedure to resolve any disputes between the shareholders of the company.
  6. It is easy to transfer interest in business through ownership of shares.
  7. A private limited company also offers improved national insurance benefits.

What is Incorporation?

Incorporation of a company is a procedure by which the company is registered at Companies House and becomes a legal entity. This process is commonly known as registration, incorporation or formation.

Formation Procedure

Easy Formations is an approved registrar and has completely automated the company incorporation procedure.You can now form your company online with no hard copy documents to sign.

Using our online company formation services, the entire procedure is completed within a few hours, and for a reduced cost compared to the old paper route.

All Easy Formations's company formation packages include the following:

  1. The Companies House legal Incorporation Fee
  2. Your Certificate of Incorporation
  3. Full Memorandum & Articles of Association
  4. Share Certificates
  5. Draft Bank Resolution

Brief Glossary of Terms

Some of the terminology used by Companies House is a little confusing, so hear are the meanings of some of the more often used:

Company Secretary or Directors
The initial shareholders upon formation
A legal document setting out the objectives of the Company. Generally, a standard set are used which cover nearly all trading types. Easy Formations recommend these.
A legal document setting out the rules for the running of the Company's internal affairs. Generally, a standard set are used which cover nearly all trading types. Easy Formations recommend these.