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Coddan CPM Ltd. – Company Registration Agent in the UK
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Why to Choose be Registered as Unlimited Company?

Why to choose to be registered as an unlimited company in the UK

Starting-Up an Unlimited Company

Why to choose an unlimited company establishment in the U.K.: unlimited firms are a less common feature than limited corporations, but that doesn't mean that they're not the right choice for many businesses. In fact, due to there not being a legal requirement to display the unlimited status of an entity, there are more examples out there than you might think, including big names such as arms of GlaxoSmithKline and Credit Suisse International. But what makes establishment as an unlimited company in the UK any different from being registered as a limited company, and why is it potentially advantageous? Here is a brief overview of the benefits involved.

A responsible and respected business: to understand why an unlimited firm stands to gain from this kind of structure, it's important to understand how it differs from the limited model. In terms of day to day finances they are essentially identical. The difference comes from the responsibility that members and shareholders have when it comes to the success of the company.

In a limited company, the act of formal liquidation entitles creditors to make use of company assets in the reclamation of owed money, but the assets of shareholders are out of bounds. In an unlimited entity this isn't the case. Formal liquidation means that members and shareholder's assets can be used to settle outstanding monetary obligations.

This may sound like a negative, but in fact it represents a greater show of responsibility on the part of members and shareholders, which in turn leads to greater confidence in creditors. The net result of this is a business model that cultivates higher regard, and has a reputation for taking fewer risks that might jeopardise the future of the business.

Secrecy and discretion: registering  as an unlimited company in the UK also brings with it the advantage of less transparency for competitors. Most British, Scottish and Walsh unlimited companies are not obliged to publish financial statements. Similarly, shareholder dividends aren't made public, which can be appealing to some investors.

Finally, unlimited companies tend to be self sufficient in terms of the profits of trading and the capital they maintain, so that means less need for high street loans, and more confidence. If you wish to discuss how to establish an unlimited company in the Great Britain, please contact us.