United Kingdom    Global Business Entities Guide     United Kingdom     Public Company Limited by Shares

Limited Liability Partnership (LLP)

Private Limited Company - LTD
England, Wales and Northern Ireland

Unincorporated Partnership

Company Limited by Guarantee - CLG
England, Wales and Northern Ireland

Public Company Limited by Shares - PLC
England, Wales and Northern Ireland

Limited Partnerships – LP

What is the main source of law authorising this entity form?

Companies Act 2006

Give a brief summary of the entity form:

Does the entity possess separate legal personality?

Possesses separate legal personality.

Governing document(s)

A company is governed by its constitution, namely the Articles of Association which sets out its internal rules and regulations. The person forming the company must select if they are adopting the statutory model articles in their entirety, the model articles with amended provisions, or entirely bespoke articles. Liability of shareholders is limited to the amount unpaid on their shares– their nominal value.

(Governing) bodies

Companies incorporated in England and Wales are governed by the laws of England and Wales and Companies incorporated in Northern Ireland are governed by the laws of Northern Ireland.

Can this type of entity be involved in international transactions and restructurings (e.g. cross border mergers, asset acquisitions, equity acquisitions, etc.)?


The ability of UK companies to participate in mergers under the EU cross-border merger regime has been affected by Brexit. In particular, following the end of the Brexit implementation period, the Companies (Cross–Border Mergers) Regulations 2007 (Regulations) were revoked by the Companies, Limited Liability Partnerships and Partnerships (Amendment etc.) (EU Exit) Regulations 2019, SI 2019/348.

Can this type of entity be publicly listed or held?


Can this type of entity be used for a non-profit or charitable organization?


Give a brief summary of the process of incorporation, formation, or organization, including:

Main documents required

Main documents to be lodged with the Registrar at Companies House on incorporation:

  • Form IN01 – to include information in relation to the company’s intended principal business activities and a statement of capital & initial members (amongst other things);
  • Memorandum of association;
  • Articles of association (if amending or replacing model articles).
Involvement of notary, company register, governmental authorities

Company starts to exist when Registrar issues the certificate of incorporation (which details the official company number and date of incorporation).

A PLC cannot conduct business or exercise its borrowing powers until it has obtained a trading certificate from Companies House. It is an offence to trade without a certificate and the directors are liable to a fine. To obtain a certificate:

  • Complete Form SH50 and submit this to Companies House;
  • Confirmation is obtained (via the form) that the minimum allotted share capital requirement has been met. The authorised minimum is £50,000 and must be satisfied in sterling or the euro equivalent (not partly in sterling and party in euro). At least 25% of the capital must have been paid up to the company. If at any stage the company’s capital is reduced below this, they must re-register as a private company.
Timing (estimate) and main costs, including registration and similar fees (excluding legal fees)

Normal hard copy service: certificate of incorporation (usually issued within 7 days) and costs £40;

Same day (hard copy only) service through an agent: Costs £100. Documents and fees must be received by the Companies House office before 3pm to avail of the same day service and the envelope enclosing same must be clearly marked “Same day service”. The certificate of incorporation will be available for collection on that day (or will be posted that day, whichever method is selected). Documents delivered after 3pm will be processed the next working day. ;

Electronic service: £12 standard service.

Is a description of the anticipated business or purpose of the entity required for incorporation, formation or organization?

If a private company has re-registered as a public company, a different process must be followed.

Minimum number of incorporators / shareholders and residency requirements

Minimum of 2 shareholders that must be individuals over the age of 16. No residency requirements.

Minimum number of directors (or other applicable officers) and residency requirements
  • Minimum of 2 directors (who may also be a shareholder of the company)
  • At least 1 director must be an individual. Each director who is an individual must be over 16 years of age.
  • No residency requirements
  • Must have at least 1 secretary & at least 1 secretary must be qualified to act as a secretary as described below.

Minimum share capital, or equivalent, and payment requirements (including opening a bank account)
  • To trade as a public company, the company must meet the minimum allotted share capital requirement.
  • The authorised minimum is £50,000 and must be entirely satisfied in sterling or the euro equivalent (not partly in sterling and partly in euro). At least 25% of the capital must have been paid up to the company. If at any stage the company’s capital is reduced below this minimum, the company must re-register as a private company.
  • If the company is listed on a regulated securities exchange, at least 25% of its shares must be in public hands.

Is the physical presence of incorporators / directors required in the jurisdiction for incorporation, formation or organization?


Is a tax identification number, or equivalent, required? If so, how is it obtained?

A company is issued with a Unique Taxpayer Reference (UTR) from the HM Revenue and Customs (HMRC) shortly after incorporation. A company must register for corporation tax within 3 months of commencing business, and a UTR is essential for this.

What is the title of the applicable company registry?

Companies House

What types of information must be filed at the (company) register, and which of them will it be publicly available, e.g.:

The following must be filed at Companies House (and are all publicly available):

  • Memorandum of Association;
  • Articles of association (if amending or replacing the model articles);
  • Annual confirmation statement (previously the annual return) containing details about directors, members, registered office address and share capital;
  • Annual statutory financial accounts;
  • Information in relation to directors & secretaries (if any) (the director’s residential address will not be disclosed on the public record, and only the month and year of their date of birth will be publicly available)
  • Information in relation to persons with significant control (“PSC”) if listed on AIM;
  • Statement of particulars for any charge it gives over its assets; and
  • Special Resolutions passed by the shareholders of the company.


What is the title of the executive body and its members? What are their main duties, tasks and responsibilities?

The board of directors is the executive body of a company and their main job is to make decisions on the general day-to-day running of the company.

The board of directors’ statutory duties are governed by the Companies Act 2006 (CA 2006) as well as the fiduciary duties set out in case law. Principal duties include the following duties for a director to:

  • Act within his or her powers (s 171 CA 2006);
  • Promote the success of the company for the benefit of the members as a whole having particular regard to the matters set out in s 172 CA 2006;
  • Exercise independent judgment (s 173 CA 2006);
  • Exercise reasonable care, skill and diligence (s 174 CA 2006);
  • Avoid conflicts of interest (s 175 CA 2006);
  • Not accept benefits from third parties (s 176 CA 2006); and
  • Declare an interest in a proposed transaction or arrangement (s 177 CA 2006).

Directors should also comply with the UK Corporate Governance Code.

How are the members of the executive body appointed, dismissed and replaced?


  • First directors are appointed by notification to Companies House during the incorporation process of a statement of proposed officers setting out the particulars of each director (to include a statement that each director has consented to act in that capacity)
  • Subsequent directors are appointed as provided in to the company’s articles. The statutory model articles enable the board of directors to appoint directors (if applied and this could be varied). The general meeting (of the members) also has the power to appoint directors under the model articles. Either form AP01 (for an individual) or AP02 (for a corporate director) must be sent to Companies House to notify them of an appointment.


  • Customized articles can provide the board of directors and/or the majority of members with powers to remove a director, however in absence of this, the CA 2006 provides a statutory procedure to allow members to remove a director. In this case, directors may be removed by ordinary resolution at a general meeting (passed by a simple majority of the members who vote) provided he or she gives special notice of his intention to the Company at least 28 days prior to the meeting and the statutory procedure set out in the CA 2006 has been followed. However advice should be taken when removing a director to ensure that any contractual provisions entered into have not been breached.
  • Form TM01 must be sent to Companies House to notify them of a termination.

Is it possible to appoint corporate directors or must all directors be natural persons?

It is currently still possible to appoint a company as a director of a Northern Irish, English and Welsh company. However, the government have announced forthcoming changes to company legislation, and once implemented, Section 87 of the Small Business, Enterprise and Employment Act 2015 will prohibit the appointment of corporate directors, requiring all directors to be a “natural” person – i.e. an individual. We do not have a date for implementation of this yet.

Is there a requirement to have non-executive directors? How are they appointed, dismissed and replaced? Do non-executive directors serve on a separate body (two-tier structure) or can a one-tier board (with executive and non-executives) be appointed, or is some alternate structure used?

There is no requirement to have non-executive directors in a company but companies can and do have non-executive directors. UK company boards are unitary. Two-tier or multi-tier boards are occasionally used (for example in complex joint ventures or for large publicly traded companies) and major decisions referred to a higher level. However, these are purely internal and do not alter the position that a company's directors are ultimately responsible for management decisions.

What is the title of the body of owners / shareholders / members, and what are the main tasks / responsibilities / powers of that body?

The shareholders are responsible for the major decisions that a company must make.

A PLC must obtain shareholder approval at a general meeting for certain transactions, such as:

  • “Related party transactions” – where a transaction is between the company and a director, substantial shareholder or and a PSC or an associate of them; and
  • “Class 1” transaction – a transaction in which one of the percentage ratios (gross assets, profits, consideration, gross capital) exceeds 25%.

The following decisions are examples of those only able to be made by shareholders and passed by an ordinary resolution (i.e. they require majority approval):

  • Approving payment of a political donation;
  • Approving a loan to, or substantial property transaction involving a director;
  • Approving a payment for loss of office to a director;
  • Removing an auditor; and
  • Approving a liability limitation agreement between an auditor and the company.

The following decisions are those only to be made by shareholders and passed by a special resolution (needing 75% majority):

  • Amending the company’s articles;
  • Changing the company’s name;
  • Approving a reduction in share capital or share buy-back;
  • Disapplying pre-emption rights; and
  • Re-registration as a private limited company.

What are the majority and quorum requirements for decisions by the shareholders? Can they be varied or changed?

Member decisions (examples of which are noted above) are either passed by way of:

  • Ordinary resolutions (a simple majority of the members voting); or
  • Special resolutions (at least a 75% majority of the members voting).

All resolutions may be passed by written resolution rather than calling a general meeting (providing the statutory procedure is followed), except where the decision involves dismissing a director or the company’s auditors.

The quorum for the meeting of the members is usually set out in the company’s articles of association. The default position (subject to anything contrary in the articles) is that a quorum at every general meeting shall not be less than 2 persons holding, or representing by proxy, at least one third of the nominal amount paid up on the issued shares of the class (except treasury shares).

If at any adjourned meeting of such holders a quorum is not present, at least one person holding shares of the class who is present in person or by proxy shall be a quorum.

Any special governance regimes (e.g. depending on size, being listed at a stock exchange, or other criteria)?

Some requirements for public companies under the Companies (Miscellaneous Reporting) Regulations 2018 (the 2018 Regulations) are as follows:

  • To require quoted companies with more than 250 UK employees to report annually on the ratio of CEO pay to the average pay of their UK workforce, along with a narrative explaining changes to that ratio from year to year and setting the ratio in the context of pay and conditions across the wider workforce, and to provide a clearer explanation in remuneration policies of a range of potential outcomes from complex, share-based incentive schemes.
  • To require all companies of significant size (private as well as public) to explain how their directors comply with the requirements of section 172 of the Companies Act 2006 (the duty of a director to promote the success of the company for the benefit of members, but in so doing having regard to a number of factors and stakeholders, including employees).
  • To require all companies of significant size (private as well as public) to disclose their corporate governance arrangements in their Directors' Report and on their website, including whether they follow any formal code. This requirement will apply unless the company is subject to an existing corporate governance reporting requirement.

AIM companies have further obligations, including the requirement to disclose details of how it complies with a recognized corporate governance code chosen by its board of directors.

What are the periodic accounting obligations incumbent upon the entity? To whom must those accounts be submitted?

All companies (whether or not they are active) must keep adequate annual accounting records.

These must be filed at Companies House within 6 months from the Accounting Reference Date (ARD) (the date on which a company’s financial year ends).

For the first Annual Accounts, they must be filed within 18 months of the incorporation date.

The accounts must be audited unless the company is exempt.

Public companies must keep accounting records for 6 years from the date they were made.

A PLC must lay its accounts before its members at an annual general meeting (or by method determined by an ordinary resolution).

Is the entity permitted to determine its own financial year?

The ARD set on incorporation is the last day of the month of the anniversary of the company’s incorporation (unless otherwise specified or varied).

The ARF can be altered by submitting Form AA01 to Companies House.

A company can only lengthen its financial year to a maximum of 18 months and only once every 5 years.

Is the entity subject to any statutory (external) auditor obligations?

Companies must have their accounts audited by a professional auditor. They must appoint a statutory auditor and file an auditor’s report on their accounts, strategic report and directors’ report (at the same time as filing their annual accounts).

PLCs are subject to more stringent accounting requirements.

Requirements to appoint other persons (officers, secretary, internal auditor / accountants). If so, what are their functions? Are there any residency requirements?

Unless exempt, all companies must appoint an external/statutory auditor.

PLCs are required to have at least one secretary who is qualified to act as a secretary. The directors must take all reasonable steps to ensure the secretary has the requisite knowledge and experience to discharge their functions and must be:

  • chartered secretary;
  • chartered accountant in the UK or Ireland;
  • a solicitor, barrister or advocate in the UK;

or have been:

  • the company secretary of a public company for at least 3 of the previous 5 years; or
  • a person who, because of his or her experience or membership of another body, appears capable of discharging the functions of a company secretary.

They will not be a member of the board but are an officer of the company and therefore authorised to conduct business on behalf of the company.

The range of responsibilities and duties of a company secretary will depend on factors such as the size of the company, whether the company is listed and its line of business.

There are no residency requirements.

What is the title designated for 'ownership interests' (e.g. shares, quota, interests, membership)?


Are different classes of ownership interests possible? If so, what are some examples of different classes?

Yes. Different shareholders can have different rights depending on the class of shares. There is no limit on the number of different classes of shares a company can have.

The most commonly issued share type is an ordinary share and the rights are set out in the company’s articles. An ordinary share can, dependent on the articles, entitle the holder to dividends, voting rights and payment on winding up.

Another type is preference shares which typically give the holder preferential rights regarding entitlement to dividends and on winding up but no/limited voting rights.

What documentation is required for the transfer of ownership interests?

Stock Transfer Form

Are there any additional formal requirements required for the transfer of ownership (notary, approvals, stamping, filings, corporate records)?

The proposed transfer is submitted to the company for approval.

The transfer form is executed and submitted to HMRC with the relevant stamp duty for stamping .

Once a stamped transfer form is received from HMRC, the share certificate can be issued and the register of members updated.

Are there any applicable stamp duties imposed when transferring ownership interests?

A stamp duty of 0.5% is payable on the price paid for shares in excess of £1000. The amount owed should be rounded up to the nearest £5 and paid to HMRC within 30 days of the transfer.

How are shares issued? (including information on payment obligations, registration requirements)

A PLC must not allot shares following an offer to subscribe unless all the shares offered are fully subscribed for or the offer is made on the basis that the shares subscribed for will be allotted in any event.

A listed company must comply with the provisions of the Listing Rules and the Disclosure Guidance and Transparency Rules regarding circulars and notification obligations.

Every share issued by a PLC must be paid up as to at least a quarter of its nominal value plus the whole of any premium payable.

A share cannot be allotted, other than for cash, if the consideration is or includes an undertaking to be carried out more than 5 years after the allotment.

A share cannot be allotted for non cash consideration unless the consideration has been independently valued.

Any new shares issued must be notified to Companies House using the relevant forms and along with any accompanying approvals as soon as possible, or within two months of the allotment.

The company is required to issue a share certificate within two months of the allotment (with exceptions).

Further information on equity contributions, e.g., non-cash payments on shares, (share premium) contributions without issuances of shares, can partially paid shares/ownership interests be permitted and what are the restrictions on them?

Public companies are prohibited from giving financial assistance whether directly or indirectly for the purpose of the acquisition of their shares. This covers the giving of loans, guarantees, security and other financial assistance that materially reduces the company’s net assets.

Any requirements with respect to share cancellation, share repurchase and other capital reductions

Limited companies in the UK must comply with the CA 2006 when purchasing their own shares.

When a public company is purchasing their own shares, they must consider:

  • The City Code on Takeovers and Mergers;
  • The Listing Rules;
  • The Disclosure Guidance and Transparency Rules; and
  • The AIM Rules.

PLCs can carry out reductions in share capital using a court approved procedure; however their share capital must always reach the minimum of £50,000 of which a quarter of the nominal value must be paid up.

Any requirements with respect to distributions to shareholders?

There are two types of dividend, namely final and interim. Dividends can only be paid:

  • out of distributable profits;
  • (for a public company who is not an investment company) if the net asset test is satisfied i.e. if the company’s net assets are not less than the aggregate of its called up share capital and undistributable reserves and are not reduced to less than that amount by the distribution; and
  • may only be paid in cash.

Can the owners or shareholders adopt a restrictive or governing agreement among themselves such as a Shareholders Agreement?

Shareholder Agreements are common and can address issues not addressed in the company’s articles of association.

Which are the typical annual maintenance costs of maintaining the existence and legal good standing of such an entity (excluding legal fees)?

The taxes applicable to a company limited by guarantee are as follows:

  • Corporation tax
  • Value Added Tax (VAT)
  • Stamp duty where applicable
  • PAYE (income tax and national insurance on staff salaries)

Other than tax, there is an annual filing fee with the confirmation statement of £13 (if filed online) or £40 (if filed by paper). There are also penalties/fines applied for late filing of documents with Companies House and in particular automatic fines apply when the statutory annual accounts are not filed on time:-

Up to 1 month £750

1 to 3 months £1,500

3 to 6 months £3,000

More than 6 months £7,500

If the company is listed, they may pay an admission fee to the market and an annual fee thereafter.

What are the general corporate tax rates? (Specify if there is a national versus local distinction).

The corporation tax rate for company profits is 19% and is subject to change if government policy changes. There is no national/local distinction at present.

Summary of any specific matters, e.g. recent or prospective major legal developments

It is unclear whether provisions contained in English company law which stem from EU Directives will remain in force after Brexit.

Stock Exchange Requirements:

A PLC will need to comply with the specific requirements of the relevant listing authority relating to (for example) offers and takeovers, insider dealing, disclosure of related party transactions and certain share dealings.

Search by:

Need more information?
Contact a member firm:
Simon Bickerdike
Penningtons Manches Cooper LLP
UK - England

Catherine Moss
Shakespeare Martineau LLP
UK - England

Damian McParland
Millar McCall Wylie LLP
UK - Northern Ireland