A public corporation limited by shares is a separate legal entity from its shareholders. Members who possess a share in the firm are its owners. The company’s directors oversee its operations following the requirements of the Companies Act of 2006 (CA 2006) and the articles of association, which serve as the organization’s governing charter. Public limited corporations (PLCs) are legal entities unto themselves. This implies that the company’s finances are distinct from the members’ money.
Characteristics of public limited companies
A public company limited by shares must meet the following requirements to operate legally:
- have at least two shareholders;
- have publicly issued shares valued at at least £50,000 or the prescribed equivalent in euros;
- be registered with Companies House;
- have at least two directors, at least one of whom must be an individual;
- each director who is an individual must be at least 16 years old;
- have a qualified company secretary; and more.
Managing and obtaining funding
The only kind of company that may raise capital by offering shares to the general public is a PLC:
- Individuals or other corporations may own shares.
- The stock exchange may or may not be used for trading the shares.
- Loans and retained earnings are other ways to obtain money.
- The corporation may require directors to provide personal guarantees for borrowing.
- The management choices are often made by a board of directors.
Accounts and records
PLCs are required to: Send Companies House an annual report.
- Once a year, submit financial statements to Companies House;
- Unless the firm is exempt, the financial statements must be audited.
- Changes in the organization’s management and structure must be reported to the Companies House by the directors.
- Except for profits maintained in the company as working capital, earnings are typically dispersed to shareholders as dividends.
Taxes and social security
A PLC must notify HM Revenue & Customs (HMRC) of its existence and Corporation Tax liability if it has any taxable revenue or profits. After that, it must file a company tax return to HMRC together with any unpaid corporation tax. A PLC must also adhere to HMRC’s PAYE for employers and VAT regulations. Each year, company directors are required to submit a Self Assessment tax return. Learn how to register on GOV.UK for self-assessment.
Liability
Each member’s obligation is just for the outstanding balance on their shares. Except in cases when they have offered guarantees, such as when taking out a bank loan, members are not liable for the company’s obligations.
Taxes
A business limited by guarantee is subject to Corporation Tax, Value Added Tax (VAT), Stamp Duty if applicable, and PAYE (income tax and national insurance on staff salaries). In addition to taxes, there is an annual filing charge with the confirmation statement of £40 (if filed by paper) or £13 (if filed online).
How to form a UK public corporation limited by shares.
The steps for formation are:
Pick a business name
Pick a name for your business that is distinct, not in use by another business, and devoid of any triggering or insulting words. By utilizing the Companies House WebCheck tool or a search of the Companies House database, you may determine if a business name is available.
Create the required paperwork
To register your business, you will need to prepare some paperwork, including:
Articles of association
This document lists the company’s name, its objectives (or the reason it was founded), and the names of the subscribers (i.e. the people who are agreeing to form the company).
Association bylaws
The guidelines for how the business will be governed, how decisions will be taken, and how shares of the firm will be issued and transferred are all outlined in this document.
Form IN01
You must use this form to register your business with Companies House. On this form, you must submit details about the business, its directors, and its stockholders.
Register the business
You must submit Companies House the filled-out Form IN01 and the other paperwork to register your firm. This may be done online or by mail. A registration fee is furthermore required; it is now £40 for online registration and £60 for postal registration.
The acquisition of a business registration number
Companies House will give your business a special company registration number once you’ve registered it. Your firm will be identified by this number, often known as the “registration number” or “company number,” in all official interactions.
Create a registered office
Your business must have a registered office in the UK, which will serve as your business’s mailing address. All official letters, such as court papers and tax correspondence, will be sent to this address.
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