The main uses of unlimited company in business activities: in many ways, an unlimited company looks just the same as a limited company. Look deeper below the surface, however, and it will become apparent that there are some key differences, which mean an unlimited company can be used in different ways to a limited one.
Firstly, an unlimited company is ideal for people who want to keep their financial affairs secret. Under UK law, a private company is required to publish all of its key financial data for the public to see, usually on an annual basis. There is no such requirement, generally, for an unlimited company to do this. As such, unlimited companies have a real advantage, as they do not need to share data with their limited competitors, though they can see all the competitors' publicly-published data.
Secondly an unlimited company generally looks more attractive to creditors. Because the shareholders and similar parties bear complete liability for any monies that need to be paid in case of insolvency, creditors can always lend money with confidence to an unlimited company. If your company is at low risk of insolvency, it can be very lucrative.
In some sectors, it is simply not practical to have a limited company. In cases like these, opting for an unlimited company is crucial to succeeding in the market. These are just a few of the numerous financial and logistic uses to which an unlimited, rather than a limited, company can be put. Are you keen to set up your own unlimited company? Get in touch with us.