There are two types of limited company: private and public. Private limited companies can have one or more directors and cannot offer shares to the public. Public limited companies, on the other hand, must have two or more directors, and must have allotted £50,000 (or more) of shares before it can trade.
All limited companies must register with Companies House. Private limited companies are not obliged to appoint a company secretary. However, if a company secretary is appointed, Companies House must be notified.
Any management decisions must be taken by a director or the board of directors, whilst the shareholders retain overall control through yearly general management meetings where they can vote on key decisions and, where necessary, remove and re-appoint directors or limit their powers. Company accounts must be submitted to Companies House, and companies must be audited every year. Small companies and dormant companies are exempted from the auditing requirement. Any changes in management or management structure would also have to be reported to Companies House.
Any profits made by the company (excluding those put back into the business) can be used as the directors and shareholders see fit. Shareholders can be rewarded for their investment in the company in the form of dividends. Companies are obliged to pay corporation tax on any taxable income or profits, and must submit an annual return to HMRC unless dormant. Company directors, where salaried, must pay both income tax and class 1 national insurance in the normal course.
It should also be noted that, while shareholders are not personally liable for any losses the company makes, directors might be asked to act as guarantors for any loans made to the company.