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Limited companies and limited liability partnerships are privately owned by individual people and/or corporate bodies. They are collectively known as 'members'. Company members are called ‘shareholders’ or ‘guarantors', depending on whether the company is limited by shares or limited by guarantee. LLP members are often referred to as 'partners'.
Limited companies also have to appoint directors to manage day-to-day business activities on behalf of their members. Some companies also choose to appoint secretaries to assist directors with their duties and responsibilities. Collectively, directors and secretaries are called ‘company officers’.
Company members and officers are often the same people, which means a company can be owned and managed by the same people. In fact, a company need only have one member and one director; therefore, it is possible for just one person to set up a limited company and run it on their own. There is no restriction to the maximum number of members and/or officers a company has during or after incorporation.
LLPs must have a minimum of two members to be set up, but there is no upper limit to the number of partners an LLP can have. There are no officers in an LLP - there are only members and ‘designated members’. All members have the same rights, but designated members are responsible for taking on statutory reporting and filing duties on behalf of the entire partnership.
Private limited companies are owned by one or more individuals (human or corporate) known as ‘members’. The members of limited by shares companies are called shareholders. The members of limited by guarantee companies are known as guarantors.
Any individual person or corporate body can be a limited company shareholder or guarantor. In most cases, company members are also directors.
The main rights and duties of company members are:
The financial security provided by company members is known as ‘limited liability'. If a company is unable to meet its financial obligations, members are required to contribute a pre-determined amount of money toward their company’s debts. The financial liability of shareholders is the nominal value of their shares. The financial liability of guarantors is the sum agreed in their statements of guarantee.
The members of companies limited by shares usually draw up a shareholders’ agreement to outline their collective and individual rights and responsibilities. This is an effective way to avoid ambiguity and disagreement between members further down the line. Shareholders’ agreements usually include details about:
It is incredibly easy to add shareholders or guarantors during the company formation process if you register online through Quality Formations:
Repeat this process for every member you wish to add to your new company. When your company is registered, the details of all new members will be listed on the memorandum of association to signify their membership and limited liability. This information will also be displayed on public record.
If you wish to add a new member after incorporation, you must notify Companies House by filing a confirmation statement - you cannot use the same process as above. You can deliver a confirmation statement immediately or you can wait until the filing deadline. New shareholders will have to purchase one or more shares in the company, and guarantors will have to agree to a financial guarantee.
Details of all new members must be entered in the company’s statutory register as soon as possible. Companies House will update the public register after a confirmation statement is filed.
You can remove shareholders and guarantors from your company at any time after incorporation by completing a confirmation statement for Companies House.
In order to transfer the shares, you should complete a stock transfer form (J30), prepare meeting minutes, issue new share certificate(s) and update the register of members.
Almost any individual person or corporate body can be the director of a limited company, including shareholders, guarantors and company secretaries. In fact, in most companies, directors are also shareholders or guarantors. However, a person may not be a company director if they are:
The main duties and responsibilities of limited company directors include:
To appoint a director to your company during the incorporation process, you will have to follow these simple steps:
To appoint a new director after company incorporation, sign into your Quality Formations online account, follow the same steps as above and submit the information to Companies House. The public register will be updated within approximately 24 hours. The company’s statutory register of directors must be updated immediately to reflect the new appointment.
You can easily remove a director from your company after incorporation through Quality Formation's Client Admin Portal. Simply sign into your client account, select the relevant company officer, click ‘Edit’ and untick Director’s position and submit the information to Companies House. The termination will be updated on the public register within approximately 24 hours. The company’s statutory register of directors should also be updated to reflect the termination.
Click here to find out how to create a free client account with Quality Formations and start managing your company online.
A company secretary is a person or corporate body appointed by directors or members to assist directors with their day-to-day duties and responsibilities. Private limited companies are not legally required to appoint a secretary unless the articles of association state otherwise.
Almost any individual person or corporate body can be a company secretary, including shareholders, guarantors and directors. However, a person may not be a company secretary if they are:
To appoint a secretary to your company during the incorporation process, follow these simple steps:
A company secretary can be removed at any time after incorporation through our online admin portal. Simply sign into your account, select the relevant officer, click ‘Edit’ and untick secretary’s position icon next to the name of the secretary you wish to remove and submit the information to Companies House.
Companies House will update the public register within approximately 24 hours to reflect the appointment or removal of the secretary. Your company's statutory register of secretaries should also be updated accordingly.
LLP members are usually known as ‘partners’. They are the joint owners and managers of limited liability partnerships. Their duties will depend on what is agreed when the business is set up, and these duties and responsibilities can be changed at any time after incorporation if all members are in agreement.
Almost any person or corporate body can be an LLP member, however, a person may not be an LLP member if they are:
LLP members are responsible for their own workload, and they receive profits in relation to how much of the business they own and control. This is usually determined by the amount of money and time they contribute to the business, the details of which will be outlined in a partnership agreement.
Designated LLP members are partners who have been nominated to take on additional responsibilities on behalf of the entire partnership and its members. The types of duties they carry out are similar to the administrative responsibilities of company directors and secretaries, including:
At least two LLP members must be designated during the incorporation process and at all times thereafter, but it is also possible to designate all members; however, if no two members are designated, Companies House will view all members as such.
To appoint a new LLP member during the incorporation process, simply follow these steps:
To appoint a new LLP member after incorporation, sign into your Quality Formations online account (or create a new account if you are not an existing customer), follow the same steps as above and submit the information to Companies House.
You can remove an LLP member at any time after incorporation. Simply sign into Quality Formations’ client admin portal, select the relevant member, click ‘Edit’ and untick the position icon next to the appropriate member’s details and submit the information to Companies House.
Companies House will update the public register within approximately 24 hours to reflect the appointment or removal of the LLP member. Your LLP’s statutory register of members should also be updated accordingly.