Legal English – Peter’s Pills – Lesson 18 – Limited companies

Legal English for Notaries - By Federnotizie

Limited companies


Hello! Today we speak about limited companies in the UK.

The two main types of limited companies in the UK are private limited companies and public limited companies. They are called limited liability companies because shareholders are legally responsible for the debts of the company only to the amount of the nominal value of their shares, and nothing more.

Private limited companies must end with “limited” or the abbreviation “ltd” after their names and may be registered with a share capital of as little as £1.00. They are called “private” because they cannot offer their shares to the general public on stock markets. Very often their articles of association state that when selling shares of a private limited company, these shares first have to be offered to existing shareholders of the company who have a right of first refusal, and only after the existing shareholders have declined to buy the shares may these shares be sold to third parties.

Public limited companies must end with “plc” and the minimum amount required to open a plc in the UK is £50,000.00. Public limited companies may potentially be listed on stock exchanges, although the vast majority are not, and the general public may then buy their shares through stockbrokers.

As mentioned, private and public limited companies must end respectively with “ltd” or “plc” after the name of the company. Under UK law it is impossible to register a company with “ltd” or “plc” as a part of the name itself because this would cause confusion for those who are doing business with the company.

The word “quota holder”, which is sometimes used in certain European countries, is never once used in UK Companies Act 2006 and the term is uncommon in the UK. Instead the terms “shareholder”, “member” or “holder” of shares are interchangeable for CA 2006 purposes both for public and private companies.

Thank you very much and see you next time for more Peter’s Pills to improve your Legal English!

private limited companiesparagonabile alle società a responsabilità limitata (srl)
public limited companiesparagonabile alle società per azioni (spa)
stock marketsmercati azionari
stock exchangesborsa valori
articles of associationstatuto
right of first refusaldiritto di prelazione
be listedessere quotato in borsa
stockbrokersagenti di cambio / agenti di borsa
“shareholder” = “member” = “holder” of shares

See the entire UK Companies Act 2006 here: “Companies Act 2006” (.PDF).

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