? asked in Business & FinanceSmall Business · 1 decade ago

What are the pricipal differences between a partnership and a limited company in the UK.?

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  • ?
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    1 decade ago
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    [edit] United Kingdom limited partnership

    Main articles: UK partnership law and Partnership Act 1890

    A limited partnership in the United Kingdom consists of:

    One or more persons called general partners, who are liable for all debts and obligations of the firm; and

    One or more persons called limited partners, who contribute a sum/sums of money as capital, or property valued at a stated amount. Limited partners are not liable for the debts and obligations of the firm beyond the amount contributed.

    Limited partners may not:

    Draw out or receive back any part of their contributions to the partnership during its lifetime; or

    Take part in the management of the business or have power to bind the firm.

    If they do, they become liable for all the debts and obligations of the firm up to the amount drawn out or received back or incurred while taking part in the management, as the case may be.

    A limited company in the United Kingdom or Ireland is a corporation whose liability is limited by shares (Ltd), which is the most common form of privately held company. Its equivalent in Australia is Proprietary company (Pty Ltd). Ltd in Australia would usually mean that a company with Ltd in the end of a company name would be listed on the ASX, meaning it would be a public company as Australia doesn't have plc.

    private company limited by guarantee

    This type of Company 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. Frequently charities incorporate using this form of limited liability. Another example is the Financial Services Authority.

    public limited company (plc)

    Public limited companies can be publicly traded on a stock exchange — similar to the U.S. Corporation (Corp) and the German Aktiengesellschaft (AG).

    A shareholder in a limited company, in the event of its becoming insolvent (equivalent to bankruptcy in the US) 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.

    A limited company can be registered in England and Wales, Scotland, Northern Ireland or Australia. The registration of companies in Great Britain (England, Scotland and Wales) is done through Companies House.

    The registration of companies in Northern Ireland has been the responsibility of Department of Enterprise, Trade and Investment. From 1st October 2009 responsibility transfers to Companies House, under the Department for Business Enterprise and Regulatory Reform (BERR)[1].

    Northern Ireland will retain a registry function and presence along similar lines to the Companies House Scotland model. This means that the office will remain in Belfast and we will retain the Registrar for Northern Ireland.

    Equivalent constructs to 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 (like, for example, the German Aktiengesellschaft (AG) and the Mexican, French and Polish S.A.), and the "private" types of company (such as the German GmbH and the Polish Sp. z o.o.).

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