Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

VAT Registration

HM Revenue & Customs
, see all updates

Entity to be registered: incorporation under the Companies Acts

Bodies incorporated under the Companies Acts can be split into the following categories.

Public limited companies

Whether limited by shares or by guarantee with a share capital, public limited companies must satisfy the following statutory requirements

  • the minimum number of members is two
  • the company’s memorandum must state that the company shall be a public company
  • the company’s name must end with the words Public Limited Company or, if the company has its registered office in Wales, the Welsh equivalent, but these words can not be preceded by the word limited (in English or Welsh). They may use the acronym, ‘plc’
  • the allotted capital of the company may not be less than the authorised minimum
  • each of the allotted shares must be paid up to at least a quarter of the nominal value and the whole premium
  • the company must be registered, or re-registered, with the Registrar of Companies (Companies House) as a public company.

Private companies limited by shares

A company limited by shares is defined as, ‘a company which has the liability of its members limited, by the memorandum, to the amount, if any, unpaid on the shares held by them’.

Consequently, the memorandum of the company and, more specifically, its ‘capital clause’, has to provide that the share capital is divided into shares of a fixed amount. It is this amount which determines the maximum liability of the shareholder.

Once the shares are fully paid up there is, generally speaking, no further liability. This means that, should the company become insolvent, the members or shareholders are not required to provide any further funds to meet its debts.

Private companies limited by guarantee

The Companies Act defines a company limited by guarantee as ‘a company having the liability of its members limited by the memorandum to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of its being wound up’.

Under the Companies Act 1985, section 30(2), private companies limited by guarantee may be exempted from the requirement to suffix their names with the word ‘limited’.

Unlimited companies

An unlimited company is a company which has no limit on the liability of its members. Members are liable to contribute to the assets on a winding up should the company have insufficient assets to satisfy its debts and liabilities. Former members who ceased to be members within the previous year may also be liable for debts incurred before they ceased to be members. Only private unlimited companies may be formed.