Starting a new business? Get 40% off our accountancy services for 3 months! 😀

x

Amongst the different types of limited company, there are those which are privately owned, and those owned publicly. So what’s the difference?

Liability in public and private companies

A limited company exists in its own right, completely separate from the owner’s or shareholders’ finances. The owners or shareholders have their liability limited to what they have invested in the company.

This means that they don’t become personally liable for money that the business owes. If the company has debts, collectors can’t pursue the shareholders and owners beyond their investment in the company.

If any claims are made against the business, only company assets can be seized.

accounting services for limited companies

Setting up private companies versus public ones

If you set up any type of company, you must tell Companies House. Registering a company is known as incorporation, or formation. Registering with Companies House automatically notifies HMRC, ready for Corporation Tax.

You can register the company yourself, or outsource the incorporation process, for instance by using a solicitor, accountant or an agent. There are differences in what public and private companies must have in order to register, and how they operate.

Public limited company (PLC) Private company (Ltd)
A public company must have a minimum of £50,000 in share capital. Doesn’t require minimum share capital.
Can sell shares on the stock market to raise money for the company. Cannot trade on stock market. The company and its shareholders can only transfer or sell shares privately.
Must have a company secretary and at least two directors, who are all different people.
  • Requires at least one individual to act as director, who must be at least 16 years old.
  • This person can also be the sole shareholder.
  • Does not need to have a company secretary.

Both set ups must pay Corporation Tax on any company profits. The directors must also register for Self Assessment, even if they only take a salary through the company.

About The Author

Beth-Anne Bruce

I'm an experienced and fully AAT and ACCA qualified accountant, who is enthusiastic about helping business owners succeed. I also love cooking and needlepoint (at different times!). Learn more about Beth.

More posts by this author
guest
0 Comments
Inline Feedbacks
View all comments

Read more posts...

Umbrella Companies for Self-Employed Contractors

When you set up in business as a contractor you might either work as a sole trader or as a limited company….

Read More

Get Ready for Small Business Saturday UK 2022

Small Business Saturday started in the US in 2010, on the first Saturday following Thanksgiving. It aims to encourage shoppers to consider…

Read More

Architects and Tax

Architecture is a highly diverse sector when it comes to tax. It’s partly down to the type of businesses that carry out…

Read More
Back to Blog...

Confirm Transactions

The number of monthly transactions you have entered based on your turnover seem high. A transaction is one bookkeeping entry such as a sale, purchase, payment or receipt. Are you sure this is correct?

Yes, submit my quote
No, let me change it

Please contact our sales team if you’re unsure

VAT Returns

It is unlikely you will need this service, unless you are voluntarily registered for VAT.

Are you sure this is correct?

Yes, the business is VAT registered
No, let me change it

Call us on 020 3355 4047 if you’re not sure.

Bookkeeping

You only need this service if you want us to complete the bookkeeping on your behalf.

Would you prefer to complete your own bookkeeping?

Yes
No

Call us on 020 3355 4047 if you’re not sure.