LIMITED COMPANY

Nama : Stephanie Octaviani Kelas : 3Eb19 Npm : 21209655 Pelajaran : Bahasa Inggris Bisnis 2 Dosen : Wijanarko Agus Wibowo, MHUM LIMITED COMPANY A limited company is a company in which the liability of the members or subscribers of the company is limited to what they have invested or guaranteed to the company. Limited companies may be limited by shares or by guarantee. And the former of these, a limited company limited by shares, may be further divided into public companies and private companies. Who may become a member of a private limited company is restricted by law and by the company's rules. In contrast anyone may buy shares in a public limited company. Limited companies can be found in most countries, although the detailed rules governing them vary widely. It is also common for a distinction to be made between the publicly tradable companies of plc type (for example, the German Aktiengesellschaft (AG), Czech a.s. and the Mexican, French, Polish and Romanian S.A.), and the "private" types of company (such as the German GmbH, Polish Sp. z o.o., the Czech s.r.o. and Slovak s.r.o.). Kinds Private company limited by guarantee Main article: Private company limited by guarantee A company that does not have share capital, but is guaranteed by its members who agree to pay a fixed amount in the event of the company's liquidation. Charitable organisations often incorporate using this form of limited liability. Another example is the Financial Services Authority. In Australia, only an unlisted public company can be limited by guarantee. Private company limited by shares Main article: Private company limited by shares Has shareholders with limited liability and its shares may not be offered to the general public. Shareholders of private companies limited by shares are often bound to offer the shares to their fellow shareholders prior to selling them to a third party. Public limited company Main article: Public limited company Public limited companies can be publicly traded on a stock exchange — similar to the U.S. Corporation (Corp.) and the German Aktiengesellschaft (AG). In specific countries United Kingdom The registration of companies in the United Kingdom is done through Companies House, which operates offices in London, Cardiff, Nantgarw, Edinburgh and Belfast. Prior to 1 October 2009 the registration of companies in Northern Ireland was the responsibility of the Department of Enterprise, Trade and Investment (a department of the devolved government). On the commencement of the Companies Act 2006 Northern Ireland's previously distinct company law was repealed and the new companies code instituted by that Act was extended to Northern Ireland. Canada In Canada, a person wishing to register a limited company must file Articles of Incorporation with either their provincial government or the federal government. Australia The private company equivalent in Australia is the Proprietary Limited company (Pty Ltd). An Australian company with just Limited or Ltd at the end of its name is a public company, such as a company listed on the ASX (although public companies can be, and often are, unlisted). Australia does not have a direct equivalent to the plc. A shareholder in a limited company, in the event of its becoming insolvent (equivalent to bankruptcy in the U.S.) would be liable to contribute the amount remaining unpaid on the shares (usually zero, as most shares are issued fully paid). 'Paid' here relates to the amount paid to the company for the shares on first issue, and not to be confused with amounts paid by one shareholder to another to transfer ownership of shares between them. A shareholder is thus afforded limited liability. United States In United States the expression corporation is preferred to limited company (because corporations there have limited liability). A limited liability company (LLC) is a different entity. However, some states permit corporations to have the designation Ltd. (instead of the usual Inc.) to signify their corporate status http://en.wikipedia.org/wiki/Limited_company Limited Company The term ‘limited company’ is most often associated with businesses registered in the United Kingdom. The registration of all companies in the United Kingdom is done through Companies House. Limited companies are registered in such a way to ensure its owners have limited liability, in other words, it is classed as a separate legal entity to its owner. This means that if anything was to go wrong with the company i.e. bankruptcy or any other financial stress, then it would only be the assets of that company that were affected, the owner would not be liable to pay and their personal assets would be protected. This means that any money made by the company belongs to that company and not the owner. Therefore, if you set up a limited company and want to take an income from the money earned you must essentially employ yourself through the company and take a wage through payroll. The owners can also take money from the company profits by declaring dividends. This can be more tax efficient than taking a salary. Limited companies are owned by shareholders and ran by directors, and there is no limit on how many of each there is in one company. In smaller companies however, it is often the case that the shareholder is also the director. Ownership of a limited company can also be easily transferred which is another reason why they are popular. http://www.theaccountancy.co.uk/articles/limited-company-definition-179.html Limited Company A Limited Liability Company, quite simply is a company whose liability is limited. That’s the short version. The longer version is that a limited company is a type of company which when set-up allows an entrepreneur to keep their own assets and finances separate from the business itself. This means that people who have invested in the business (the shareholders) are only responsible for any company debts up-to the amount that they have invested and no more. It is therefore a good way for a business to get investment without risk to a personal wealth. Essentially a Limited Company is seen as an entity in its own right, which can be subject to legal action. As a separate body, a limited company can even be the director of another company. The Company Types Public Limited Companies – also known as PLCs, Public Limited Companies are businesses which have been established with at least 2 shareholders with at least £50,000 worth of shares issued. Private Limited Companies – are similar to public companies but can be run with just one member and cannot trade shares to the public to raise capital. Public Limited Companies – usually only created for very specific reasons, these sorts of companies are far less common. Formation In order to set-up a Limited Company, there are a few criteria that first have to be satisfied. These are laid out by The Companies Act 2006. Firstly, the Company must be registered with Companies House. TheCompanyWarehouse.co.uk is here to help entrepreneurs who are planning to set-up a limited company, we know what is required by the government and can offer a number of services to help new start-ups register their business and succeed in the marketplace. We have a number of company formation packages, allowing you to start-up your business, from as little as FREE (subject to T&C’s). The second requirement is that the company must have at least one Director (or two for a PLC) who is at least 16 years of age (since October 2008). Previously under the Companies Act 1985 a Director could be any age up-to 70 years old. The new Act has removed this as it was being abused by companies, have directors under 16 years of age. This was changed by The Companies Act 2006, at the same time removing the maximum age limit. All company directors under 16 are now void. The Management The director(s) run the business, the shareholders fund it and reap the rewards. The Company will be taxed on its trading profits and will have to charge VAT on services/products it offers where relevant. Our VAT registration service makes this process simple, be sure to read our guide on VAT and the different rates that might apply to your business, including how to reclaim it. Our accountancy service will help you manage the business accounts and keep the business in proper shape. Advantages of a Limited Company Limited Liability – The obvious advantage of a Limited Liability Company is the financial security that comes with business. As already mentioned, the Company’s shareholders will only be liable for any debt the company accrues according to the levels of their own investment and no more. This can provide a comfortable feeling of security for investors in the Company. Separate Entity – Due to its very nature, a limited company is deemed to be a separate legal entity from its owners. This has several advantages, including the fact that the company will exist beyond the life of its members. If they retire or die, the company will continue to exist and operate. This ensures security for employees and other members and also is an advantage which other legal forms of business are not subject to. Taxation and Tax Advantages – Limited Companies are only taxed on their profits (usually at a rate of 21%) and as such are not subject to the higher (personal) tax rates placed on sole traders or partnerships which can reach 40%. There are ways to use the limited company form to benefit the members/directors and their interests. If you are forming and running a limited company, you are recommended to pay yourself at minimum wage levels. This allows you to take advantage of the fact that the personal allowance level is £6,475. So you are required to earn over this amount before you will pay income tax on it. When you consider that income tax rates are: • 20 % on earnings up to £37,400 and; • 40% on earnings over £37,400 Then you can see the advantage of paying yourself in dividends instead of in the form of a pay packet (in the normal sense), especially when you consider that tax on dividends is only 10% and there are no NI (national insurance) charges on them! There are complexities involved where you wish to pay a pension for your retirement, but if you consider that dividends can be paid at any time during the company’s financial year (as many times as you like) it actually makes this method of paying yourself (and other members) more preferable. It also gives you further incentive to work hard to make a profit with the company, as dividends payments are made up of distribution of the company’s profit. Not Using a Company Car – Many people take pride in their company car. However, as the owner of a limited company, you are actually better off not purchasing and running a company car, but instead using your own personal car for business purposes. In this way you can charge the mileage accrued on business travel to the company which allows you to benefit from tax free fuel and the costs are actually tax deductible to the company, so you benefit in two ways. Using Your House – Starting out as a small company, you may not be able to afford to lease or buy premises to run your business from. The good news is, you can run the business from your house and claim back for the cost of doing so. If you use 1 room in your home for business purposes then you have to calculate the cost of that room by working out the costs of the house in general (water, electricity, heating, council tax and rent or mortgage interest (not the mortgage payments themselves)) then dividing that number by all the rooms in the house to give you the amount you can claim back. Ownership and Control – In the case of Private Limited Companies, the Directors are also usually the main shareholders of the Company. Thus both the ownership and control of the business remain in their hands. Decisions can be made quickly and easily, with little fuss, allowing for a more successful business management platform. Company Name – Part of registering a Limited Company, includes the registration of a Company name. This name will help identify the business in the marketplace, separating it from other Companies and protecting it. If you are thinking of setting up a Limited Company, use our FREE Company Name Search tool to ensure your chosen business name is available, then register it for FREE! A Company name is protected from the registration date, yet a Limited Company is not legally required to begin trading on that date, so registration can be a good way to secure a name for future use. Employee Shareholders – In some instances employees can purchase shares (or be granted shares via a company share scheme) and become shareholders of the company. This is good as it rewards the employee’s for their work, providing extra motivation beyond a mere salary. Not only will they have a vested interest in seeing the business succeed, but they will have a say in how it is run. Benefits of a Limited Company There are many benefits of a limited company; these are just a few that you might consider before forming a new company. Easy Formation Private Limited Companies benefit from a quick and easy to set-up. With The Company Warehouse, you can form a Private Limited Company from FREE, including a business bank account. Our Company Formation Packages include everything you need in starting a new limited company and benefit from a very quick formation time of between 2 and 5 hours. Limited Liability The obvious benefit of a Limited Liability Company is the financial security that comes with business. The Company's shareholders will only be liable for any debt the company accrues according to the levels of their own investment and no more. This can provide a comfortable feeling of security for investors in the Company. Financing (Public Limited Companies) Due to the nature of the PLC's, they can benefit from raising finance where it is needed by the sale of shares. If the company gets into financial trouble or wishes to expand, it can simply raise more funds by selling more shares. ‘Limited Title’ As part of the incorporation, the newly formed Company benefits from the use of the title ‘Ltd’ or ‘Limited’ as part of its trading name. This adds an air of professionalism to a Company, presenting a better image for the public which might result in improved turnover and profit in the long term. Company Logo's and a Corporate identity are an important part of the Company formation and success, allowing a Company to display its title on letter heads, websites, business cards and other related materials. Our Corporate Identity package will fulfill this need and our Trademark registration scheme will satisfy your other related needs. Registered Office Previously the Directors home address had to be registered as part of setting up the business and as such, was discoverable by members of the public. The recently fully implemented Companies Act 2006 has changed the law so Companies may now instead use a 'Registered Office'. This address must be registered with Companies House and used in all business correspondence. The benefit of this to a limited company is it allows a director to keep their personal details separate from the business. It is still a requirement that the directors register their personal details, but as such they are not disclosed to the public. Our Registered Office Service allows you to do just this, we will specify an address for you and forward on up-to 10 pieces of legal or statutory mail to an address of your choice. Profit Distribution Profits made by the Company will be distributed to the shareholders in the form of dividends. This allows them to reap the benefit from their investment(s) in the limited company. Ownership and Control Private Limited Companies benefit from flexibility in control and ownership. This is due to the fact that the Directors are also usually the main shareholders of the Company. Thus both the ownership and control of the business remain in their hands. Decisions can be made quickly and easily, with little fuss, allowing for a more successful business management platform. Economies of Scale Generally speaking Public Limited Companies are larger entities. Thanks to their ability to raise funds by the sale of shares, they have a larger income and thus investment. As such, PLC's can take advantage of ‘economies of scale’ by buying goods in bulk, producing goods at a lower cost, thus cutting costs and making larger profits in the long term. Company Name Part of company formation, includes the registration of a company name. A registered company name is a simple benefit for any company offering protection to a company and helping identifying the business and separating it from the competition in the marketplace. If you are thinking of setting up a Limited Company, use our FREE company name search tool to ensure your chosen business name is available, and then register it for FREE! A Company name is protected from the registration date, yet a Limited Company is not legally required to begin trading on that date, so registration can be a good way to secure a name for future use. Separate Entity Being a separate legal entity, the Limited Company will benefit from a continued existence even after the death of the shareholders and/or directors. Succession Linked to the above, a limited company benefits from ‘succession’ in that the ownership of the business can easily be transferred to someone else in the event of the current owner wishing to step down or retire. Name Change Section 79 of the Companies Act 2006 means that a company can now set its own procedures for changing its name. This might be important where a Company needs to re-brand to meet changes in the market, expansion into the foreign market or even where there has been a complaint about their current chosen name. This is a simple advantage to any Company operating in the UK. We offer a Company Name change service which will allow you to correctly and legally register your new name in order to trade properly. Share Types Another benefit of limited companies lie with their issue of shares. Limited Companies have the power to issue a number of different share classes. ‘Ordinary’ shares have no special rights or restrictions, ‘preference’ shares are given precedent during the annual payment of dividends, ‘redeemable’ shares can be bought back by the company, while ‘participating’ shares pay a dividend only if the company's profits reach a specified level. Flexibility of Objectives Historically Limited Companies were required to set the objectives of their business (referred to as ‘objects’) in their Memorandum of Association. This amended by Section 31 of the Companies Act 2006, which now allows Companies to have unrestricted objects if it so chooses, leaving them free to operate in many areas and markets. Company Property Property of the Company belongs to the Company and not the members. Thus, the property is not affected by any changes in the ownership of the Company by purchase or sale of shares. Taxation One of the benefits of being a limited company is only being subjected to tax on the company profits (usually at a rate of 21%) and therefore not subject to the higher (personal) tax rates placed on sole traders or partnerships which can reach 40%. Tax Relief Limited Companies (especially small and medium sized new start up's) are eligible in certain circumstances for benefits in the form of tax relief on spending they have made on research and development. In much the same way there are ‘capital allowances’ made to business for investment in equipment and premises, whereby companies can write off the cost of the purchase against their taxable income. This is known as an ‘annual investment allowance’ and a company can claim on the first £50,000 it spends on this area. Environmentally Friendly Company Cars Company cars with CO2 emissions less than 160gm/km and used exclusively for business are also viable for tax relief. Especially where such vehicles are fuelled by hydrogen or natural gases in an environmentally friendly way. Refuelling equipment is also included in this relief. Regenerating Company Premises In certain disadvantaged areas, companies can claim allowances on any costs of converting business properties which have been vacant for a year or more. Business Grants and Support Small and medium sized companies can take advantage of government schemes in regards to grants and other forms of support. ‘Solutions for Business’ are specifically aimed at assisting new business in a variety of areas, encouraging growth and expansion within the UK. There are many areas covered by the support, including grants for research and development, among other things. Disadvantages of a Limited Company Cost – Some people will have you believe that a Limited Company is expensive to set-up. Not so! Our Company Formation packages start from as little as FREE! And include many related services and products that would cost you highly elsewhere. Complex Accounts – There are more complex and restrictive rules governing the accounts and bookkeeping of Limited Companies than sole traders (for example). The Company is expected to produce years accounts incorporating a double entry format, balance sheets and other notes. With the (generally) larger nature of a Limited Companies business this can be a time consuming and costly undertaking. The Company Warehouses accountancy service is custom made to ease the burden on Limited Companies. Our low-cost, competitively priced service will take hold of the accounting reigns and allow you to remain free to concentrate on the running of the business. Restricted Capital Raising – For Private Limited Companies, there is a restriction on the raising of capital via sale of shares. As mentioned, PLCs can gain further funding by the sale of shares, but thi ability is lost to Private Limited Companies whose shares are restricted. Dilution of Powers – Due to the nature of Public Limited Companies, sometimes disputes will arise between Directors and Shareholders as their ideas of what is best for the company vary. Sale of shares to increase company funds will further dilute the management, as more and more people have a say in how the company is run. There is also a risk (since Companies can buy shares) that a takeover might occur this way. As you can easily see, the advantages of a Limited Company, far outweigh the disadvantages. So if you are look to set-up a company, why not let www.TheCompanyWarehouse.co.uk help you? Our expert team have been helping entrepreneurs from all over the Country form successful businesses for years. Our Company Formation Services are the lowest priced around and as you can see from the table below we provide a wealth of extras included to help you on your way to success. http://blog.thecompanywarehouse.co.uk/2010/02/03/advantages-and-disadvantages-of-a-limited-company/