The following Corporate guidance note provides comprehensive and up to date legal information covering:
A company is a separate legal entity, distinct from its members. It is owned by its members and it is managed by its directors. It is regulated by the Companies Act 2006 (CA 2006).
The company is a very commonly used business vehicle; there are over 4 million registered companies in the UK.
The following types of company are available under the CA 2006:
public or private companies limited by shares
private companies limited by guarantee (which are primarily used by charities and other not-for-profit organisations—see Practice Note: Companies limited by guarantee), and
unlimited companies (which are relatively rare—see Practice Note: Unlimited companies)
This Practice Note covers the incorporation of a public or private company limited by shares, which are the most common types of company.
One of the key reasons for choosing to incorporate a company as a form of business vehicle (as opposed to a sole trader, a partnership or another form of business vehicle) is that it is a separate legal entity which can enter contracts in its own name and is responsible for its own debts and liabilities. One of its key attractions is that its shareholders benefit from limited liability. The perceived main disadvantage of carrying on business using a company limited by shares is the level of public
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