Limited liability gives the owners of the company (its shareholders) protection if the company fails. This means that if a company is put into liquidation, the people who own the company will only be required to pay what they have already paid or agreed to pay towards settling its debts- usually what they have paid or agreed to pay for their shares.

The important difference from a public limited company is that a private company may not offer its shares for sale to the general public.

You cannot register the same company name as another name on the register. The company name cannot contain a word or words, the use of which would constitute a criminal offence; or is likely to be considered offensive.

Sensitive words include words which imply national or international pre-eminence, e.g. “British”, “English”, “National” etc. , words imply business pre-eminence or representative or authoritative status, e.g. “Association”, “Institution”, “Government”, etc. , words imply specific objects or functions, e.g. “Assurance”, “Foundation”, “Group”, etc.

Limited companies must normally have the word \'limited\' as part of their company name unless it is a company limited by guarantee. This may be abbreviated to \'ltd.\' The Welsh translation of “limited” is also accepted.

Incorporation takes 8 -10 working days after the Registrar receives the application for a new company. A same-day service is also available for an increased fee.

Corporate taxation for private companies limited by shares is currently 21% - 29.75%. Corporation tax (which includes Capital Gains Tax) is paid by UK companies based upon accounts, which are submitted to the Inland Revenue and the Registrar of Companies at the end of the company\'s financial year. A company is free to choose its financial year-end.

Companies pay corporation tax at the rate of 21% where the net profit before tax does not exceed £300,000. The tax payable increases thereafter in stages until the net profit before tax reaches £1.2 million where the top rate of corporation tax is charged at the rate of 29.75%. Tax rates on profits over £1,500,000 is at 28%.

The minimum paid up share capital is £1. Sterling is the standard currency however any currencies are permitted. The usual authorised capital is £1000.

UK companies limited by shares must have at least one shareholder. The normal category of shares are ordinary shares but, subject to the circumstances of the company, they may be preference shares, deferred shares, redeemable shares and shares with or without voting rights. Corporate shareholders are allowed. Shareholders details are available on public file.

Every company must have appointed company officers at all times.

A private company must have at least one director. Corporate Directors are permitted until 1st October 2008. From the 1st October 2008 every company will have to have at least one director who is a natural person. From 1st October 2008, the Companies Act 2006 will introduce a minimum age of 16 years old for directors of companies. Directors’ details are available on public file. Meetings of directors can take place anywhere in the world.

From 6th April 2008 it is no longer compulsory for a private company to have a company secretary unless the company’s articles of association expressly require the company to have one. Corporate secretaries are permitted.

All companies, whether trading or not, must keep accounting records and all limited companies must submit accounts for each accounting period to Companies House. Information about outstanding accounts is available on the Registrar’s website. Not filing accounts or filing late accounts could possibly have a consequence on the company’s credit rating.

Directors are personally responsible for ensuring that accounts are prepared and submitted to Companies House. Failure to do so may result in a criminal conviction and record for the director(s) and will result in financial penalties for the company.

Every company must deliver an annual return to Companies House at least once every 12 months. It has 28 days from the date to which the return is made up to do this. If you file the annual return late or not at all, the company and its director(s) and secretary can be prosecuted.

Copies of minutes, resolutions and registers of members must be maintained at the registered office of the company.

The company must state its name, in legible lettering, on the following:- (whether in hard copy, electronic or any other form):

• all the company\'s business letters and order forms; • all bills of exchange, promissory notes, endorsements, cheques and orders for money or goods purporting to be signed by, or on behalf of, the company; • all its bills of parcels, invoices, receipts and letters of credit; and on all its websites.