Type of Companies and Legal Implications | Report

Task 3
Type of companies and legal implications
There are 8 types of companies in the United Kingdom. The distinction has various aspects of the
legal status of the companies. This touches on the ownership and liquidation state. Some of the
common types of companies in the UK entail the following lists;
Public limited company
- This is cooperation where ownership is open to the public through share s and stocks.
Individual financial ability is restricted on a fixed sum through a level of investment.
Private company limited by shares
- A private company cannot be owned by members of the public. It is owned by a
nongovernmental organization or a smaller number of shareholders and sale of shares is
handled privately. The individual is responsible for financial liabilities based on their
investment.
A company limited by guarantee
- Individuals owning this type are not responsible for fixed based investment sum; the
company status is reserved for those who don’t have shareholders. Instead, they have a
group of members acting as guarantees and engage in the group contributed as a nominal
sum in case of winding up.
Unlimited company
- The key difference of unlimited and limited is there it lacks formal restrictions on the
amount of money the shareholders have to part with when the company goes into
liquidation. In formal liquidation, shareholders are responsible for settling outstanding
financial liabilities.
Limited liability partnership
- Limited liability partnerships are not legal in the UK, but rather they are incorporated as
bodies that are similar to other types of companies. The partners in this model are directly
managing the businesses.

Community Interest Company
- These are companies not driven for profit-making but to use assets and profits for
community good. It is made easy to run in that money made is not distributed to the
shareholders.
Royal charter company
- Royal charter companies refer to companies granted the power by the monarch. In the
historical arena, companies had to be approved by the Royal Charter but no longer the case
nowadays.
The formation process of companies
- A company is formed through the filling of documents with the Registrar of companies at the
Companies House under the Companies Act. Documents to be filled entail;
Form IN01, Memorandum of association and articles of Association.
- The next step is formulating a company name.
- Statement on shareholders and share capital
- Availing list of directors
- Availability of a secretary
- Registered office and address of the company
- Availability of constitutional documents
(Millington & Bayliss, 1990)
Role of an agent
- Company formation agent offers independent, professional services which aid in the
registration of companies in the Company House. They facilitate online incorporation in line
with the Companies Act 2006. They offer professional advice and guidance in the process of
registration companies.
- The services of an agent to new and existing businesses are to smoothen the process of the
company set up. The potential benefits by reducing the time-consuming aspect of company
registration encountered in the application stage, company formation agents simplify and
smoothens the incorporation process.

- Agency Law entails a legal framework which aids agency firms and forms part of the core set
of rules and guidelines for the smooth running of a business. Under this Act, agents act
within the scope of authority as either actual or apparent authority.
(Clarker et al., 2017)
References
Clarke, M.A., Hooley, R.J., Munday, R.J., Sealy, L.S., Tettenborn, A.M. and Turner, P.G., 2017.
Commercial law: Text, cases, and materials. Oxford University Press.
Millington, A.I. and Bayliss, B.T., 1990. The process of internationalisation: UK companies in the EC.
MIR: Management International Review, pp.151-161.