UK Company Types Explained

Private Limited Company (Ltd)

The most common company type in the UK by far. A private limited company has shareholders whose liability is limited to the value of their shares. Key features:

• Must have at least one director and one shareholder (can be the same person)
• Cannot offer shares to the public
• Must file annual accounts and a confirmation statement with Companies House
• Profits are subject to Corporation Tax (currently 19-25%)
• The company name must end with "Limited" or "Ltd"

This is the structure used by most small and medium businesses in the UK, from one-person IT contractors to large private companies like Dyson.

Public Limited Company (PLC)

A public limited company can offer its shares to the public and can be listed on the stock exchange. Requirements are more stringent:

• Minimum share capital of £50,000 (at least 25% paid up)
• Must have at least two directors and a company secretary
• Accounts must be filed within 6 months (vs 9 months for private companies)
• Must hold an Annual General Meeting (AGM)
• Subject to more detailed financial reporting requirements

Examples: Tesco PLC, BP PLC, Barclays PLC. Not all PLCs are listed on the stock exchange — "PLC" simply means they can offer shares publicly.

Limited Liability Partnership (LLP)

An LLP combines the flexibility of a partnership with limited liability for its members. Popular with professional services firms:

• Must have at least two designated members
• Members' liability is limited to their capital contribution
• Profits are taxed as personal income of the members (not Corporation Tax)
• Must file accounts and an annual confirmation statement
• Commonly used by law firms, accountancy practices, and consultancies

Community Interest Company (CIC)

A CIC is a special type of limited company designed for social enterprises that want to use their profits for the public good. Features:

• Must pass the "community interest test"
• Has an "asset lock" — profits and assets must be used for community benefit
• Regulated by the CIC Regulator
• Can be limited by shares or by guarantee
• Dividends are capped (if limited by shares)

Company Limited by Guarantee

Instead of shareholders, these companies have members who guarantee a nominal amount (often £1) if the company is wound up. Used by:

• Charities and non-profits
• Membership organisations
• Sports clubs and community groups
• Professional associations

They don't have share capital and typically don't distribute profits.

Charitable Incorporated Organisation (CIO)

A CIO is a legal form designed specifically for charities. Unlike a charitable company limited by guarantee, a CIO only needs to register with the Charity Commission (not Companies House for smaller CIOs). Benefits:

• Limited liability for trustees
• Less regulatory burden than a charitable company
• Can own property and enter contracts in its own name

Sole Trader

A sole trader is NOT a company — it's an individual trading in their own name. They don't appear on Companies House. Key differences:

• No limited liability — the individual is personally liable for all debts
• No filing requirements with Companies House
• Must register with HMRC for Self Assessment
• Profits taxed as personal income

If someone claims to be a "company" but doesn't appear on Companies House, they may be a sole trader (which is legitimate but offers you less protection).

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