Company now 'Ltd'

flea72

just had a letter from my employer saying the company is now Limited - what, if any, difference will this make to the company?

pin

Limited means that it is a limited liability company. This means the liabilty of the company's shareholders is limited. For securing such a limitation of liability the company has to publish certain information, which is avaiable from Companies House.

Should not really be an issue.

Was the company a partnership or a sole tradership before?

flea72

sole trader

but why would the company go Ltd - what benefits does it have for the owner, other than limiting liability? could there now be shareholders, if so, is it possible to find out who they are?

coupled with lots of other changes at work recently, ie new contracts (with strange wordings), company handbooks, visits to competitors, it just seems something is going on behind the scenes - or maybe the company is finally coming into the 21st centuary

pin

There are various reasons for becoming a company. Its not a bad thing per se. Basically as a sole trader if something happened involving the company (i.e. the firm was liable for something) your boss would be completely liable. Now as a company, it will be the company that is liable, rather than your boss.

Naturally its not as black and white as that, but I'm trying to keep it as simple as possible.

Also there are various tax reasons for being a sole trader or company (normally depending on size).

You can form a company that is "unlimited", however this is very rare for a commercial undertaking to do so, mainly because, then the undertaking's liability would be completely unlimited.

Its nothing to worry about that the company is limited.

Yes you can see the shareholder list. The company has to file an annual return with companies house, which will show that. All companies house filings are public record (however you have to pay to see this).

If you want more informaiton on the company, I would ask your boss. If you are not too keen on that, PM me. I can access the payable information easily because of my line of work.

irs101

Companies also tend to incorporate if they want to attract investment into the company - issuing shares is the easiest way of doing this. The owner may also find owning shares in the company rather than owning directly is more tax efficient personally, and he can also issue share options to himself etc.

There are also some tax efficient schemes that you need to be a limited company to use - the Enterprise Management Initiative, offering tax free share options to directors, or the Employee Share Scheme, offering share options to employees. There's also the Enterprise Investment Scheme and Venture Capital Trust to encourage investment in small companies.

Why not ask your boss - it may just be a tax or limited liability thing, in which case the should be no implications. But it could alternatively be that he is preparing for a growth push or for selling off the company.

irs

Why not ask