How many different types of companies are there?

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I am a bit confused by all of the different companies to choose from. It seems like limited by shares is the most popular. All of the sites I have consulted thus far seem to suggest that limited by shares is the most popular/common type of UK company. But now I’m seeing stuff about limited by guarantee, LLPs, sole traders, public, private and it’s all a bit confusing! I’m not 100% sure what type of company would be best suited to my needs (I want to incorporate my accounting business as a company), and so before I make a decision I would like to know how many different types of companies Companies House actually forms. Any ideas?

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A limited by shares company is the most popular type of privately owned company structure because it is suitable for anyone who wants to run a business for the purpose of generating profit whilst also protecting their personal finances with ‘limited liability’. The owners (shareholders) of this type of company can keep all of the profits for themselves and they are only responsible for covering business debts up to the value of their shares. You can register a company limited by shares online on your own or with other people.

  • Company limited by guarantee - Privately owned by one or more people. More suited to non-profit ventures and charities. No shares or shareholders in this type of company - any income the business receives is normally used to achieve its non-profit aims. Typically, the owners (guarantors) do not keep any income for themselves. The personal finances of guarantors are protected by limited liability - they are responsible only for the value of their guarantees.
  • Limited liability partnership (LLPs) - Privately owned by two or more people (partners). Best suited to certain types of profit-making professions that usually operate as partnerships - accountants and solicitors, for example. Personal finances of partners are protected by limited liability - they are only responsible for what they invest in the company or guarantee to pay toward business debts.
  • Sole trader - Privately owned by one person. Suitable for profit-making businesses that do not deal with high-value contracts or carry out activities that could lead to legal liability claims. Personal finances of owners are not protected by limited liability - the sole trader is personally responsible for all business liabilities and legal claims.
  • Public limited company (PLC) - Publicly owned company. Shares are traded on the stock market, which means anyone can buy shares in this type of company. Suited to very large corporations. Personal finances of shareholders are protected by limited liability.
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