The following Corporate guidance note provides comprehensive and up to date legal information covering:
The members of an unlimited company do not benefit from one of the deemed key advantages of incorporating a company: limited liability. Whilst there are reasons why some people might opt to use an unlimited company (the key reasons being the ability to keep their financial details private and having flexibility over the maintenance of its capital), unlimited companies are not very common due to the fact that members are subject to unlimited liability. The reason an unlimited company may wish to re-register as a limited company is likely to be in order to obtain limited liability status for its members.
The directors should carefully consider the additional restrictions and requirements that apply to private limited companies in comparison to unlimited companies. In particular, once re-registered as a private limited company, it will have to:
file accounts each year on the public register, and
comply with capital maintenance rules that do not apply to unlimited companies (for a summary of capital maintenance rules that apply to limited companies, see Practice Note: Share capital and its maintenance)
An unlimited company may be re-registered as a private limited company if:
a special resolution that it should be so re-registered is passed
the company has not previously been re-registered as unlimited, and
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