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WHAT ARE THE DIFFERENCES BETWEEN APRIVATE LIMITED COMPANY (LTD) AND ALIMITED LIABILITY PARTNERSHIP (LLP)?
WHAT IS A PRIVATE LIMITED COMPANY (LTD)? Most common incorporated business structure. Owned by shareholders and managed ...
ADVANTAGES OF INCORPORATING A LTD   Private Limited Companies have are a separate legal    entity from their owners, ther...
DISADVANTAGES OF INCORPORATING A LTD Less privacy as a result of your  company details being publically  available on the...
WHAT IS A LIMITED LIABILITY PARTNERSHIP (LLP)?   LLPs also have a separate legal    personality.   LLPs must have at lea...
ADVANTAGES OF INCORPORATING A LLP LLPs were formally  established in 2000. Midway between a  partnership (business  liab...
DISADVANTAGES OF INCORPORATING A LLP   It can be more difficult to gain    funding – unable to raise capital    by issuin...
SIMILARITIES BETWEEN LTD AND LLP Both have a separate legal identity to the directors. Both allow limited liability to t...
HOW DO I FORM A PRIVATE LIMITED COMPANY?     Within the UK, there are 3 procedures     through which to incorporate a Ltd ...
W: http://www.wisteriaformations.co.uk@: formations@wisteria.co.ukT: +44 (0)844 893 0808A BIT ABOUT WISTERIA FORMATIONS......
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What are the differences between a Private Limited Company and a Limited Liability Partnership?

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An informative article outlining the key differences between a Private Limited Company and a Limited Liability Partnership, alongside the respective advantages and disadvantages of each.

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What are the differences between a Private Limited Company and a Limited Liability Partnership?

  1. 1. WHAT ARE THE DIFFERENCES BETWEEN APRIVATE LIMITED COMPANY (LTD) AND ALIMITED LIABILITY PARTNERSHIP (LLP)?
  2. 2. WHAT IS A PRIVATE LIMITED COMPANY (LTD)? Most common incorporated business structure. Owned by shareholders and managed by directors. Private Limited Companies provide limited liability to its members because the company has a separate legal identity to its shareholders and directors. Shareholders have no personal liability beyond the amount they originally paid for their shares. Shares cannot be offered to the public. Recognised by having “Limited” or “Ltd” at the end of their company name.
  3. 3. ADVANTAGES OF INCORPORATING A LTD Private Limited Companies have are a separate legal entity from their owners, therefore the owners have no personal liability for the debts of the company. As Limited Companies are legally registered and regulated, this portrays a prestigious and professional image to your consumers. You may find it easier to obtain credit from banks with a Ltd corporate structure. Ltd companies are able to raise funds as a result of issuing shares privately. Tax advantages gained through effective tax planning – as dividends are taxed at a lower rate than income. It would probably be easier to sell a Limited Company rather than a sole trader company.
  4. 4. DISADVANTAGES OF INCORPORATING A LTD Less privacy as a result of your company details being publically available on the Companies House database. Costs of hiring an accountant are typically more costly for a Limited Company than a sole trader. Ltd companies must submit annual accounts and an annual return to Companies House, otherwise they will incur a penalty or be struck off the register of companies.
  5. 5. WHAT IS A LIMITED LIABILITY PARTNERSHIP (LLP)? LLPs also have a separate legal personality. LLPs must have at least two members. The LLP is liable for the full extent of its assets. An LLP is managed by all of its members. LLPs must prepare and file annual accounts and an annual return to Companies House. Members are entitled to an equal share of the company’s capital and profits.
  6. 6. ADVANTAGES OF INCORPORATING A LLP LLPs were formally established in 2000. Midway between a partnership (business liability) and a corporation (business security). Flexible management structure which can be decided within a Partnership Agreement that is not made publically available
  7. 7. DISADVANTAGES OF INCORPORATING A LLP It can be more difficult to gain funding – unable to raise capital by issuing and selling new shares. You are unable to leave a LLP dormant, therefore you cannot reserve your company name for a future project through dormancy. There is no legal requirement to have a Partnership Agreement and if the LLP does not have one governing internal relationships, issues could arise.
  8. 8. SIMILARITIES BETWEEN LTD AND LLP Both have a separate legal identity to the directors. Both allow limited liability to the amount directors and/or members originally paid for their shares, so less risk associated. The company itself is liable for its assets.
  9. 9. HOW DO I FORM A PRIVATE LIMITED COMPANY? Within the UK, there are 3 procedures through which to incorporate a Ltd company:1) Companies House – you are required to fill in the relevant forms with limited support.2) By means of a Lawyer or an Accountant – most expensive method.1) By means of a specialised Company Formations Agent – for instance Wisteria Formations.
  10. 10. W: http://www.wisteriaformations.co.uk@: formations@wisteria.co.ukT: +44 (0)844 893 0808A BIT ABOUT WISTERIA FORMATIONS...UK Company Incorporation for £24.99.Easy 10-step application process online.Free business bank account referral with HSBC or Barclays.Free consultation with a Chartered Accountant or CharteredTax Adviser to get your business off to the best start!

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