Types Of Companies

Question 1

Four types of company?

Answer 1

1. Unlimited company (sole trader)
2. Public company limited by shares (plc)
3. Private company limited by shares (ltd)
4. Private company limited by guarantee - no shares in company

Question 2

Unlimited company (sole trader)

Answer 2

1. Owned not separate from the business
2. Unlimited liability
3. Liable to income tax on profit

Question 3

Public company limited by shares (plc)

- public limited company

Answer 3

• registered as public company
• min capital of £50000
• must obtain trading certificate before start of trading
• min 2 directors
• qualified secretary
• accounts 6 months from year end
• audit needed
• AGM held each year
• cannot pass written resolutions

Question 4

Private company limited by shares (ltd)

- limited company

Answer 4

• any company that is not a plc
• no min capital
• start trading as soon as certificate of incorporation recorded
• min 1 director
• no secretory needed
• accounts 9 months from year end
• audit not needed if total overhead < £10.2 m
• AGM not needed to be held
• can pass written resolutions

Question 5

Private company limited by guarantee

Answer 5

• just state is a type of company

- guarantee has no shares in company (basically charity)

Question 6

Unlimited liability

Limited liability

Answer 6

Unlimited liability= seen as one -company takes blame

Limited liability= separate legal identity -debt falls on person to blame

Question 7

what isn’t a company

Answer 7

PARTNERSHIP

Question 8

if have to advise one go for…

Answer 8

• private limited company (safe bet)