Public companies limited by shares

Published by a UU��ֱ�� Corporate expert

Practice notes

Public companies limited by shares

Published by a UU��ֱ�� Corporate expert

Practice notes

What is a public company limited by shares?

A public company limited by shares is a legal entity which is separate and distinct from its members. It is owned by its members who hold shares in the company. It is managed by its directors in line with the provisions of the Companies Act 2006 (CA 2006) and the company’s governing constitutional document, otherwise known as the articles of association.

The company is a very commonly used business vehicle. There are over five million registered limited companies on the Companies House public register. 95% of those companies are private companies limited by shares. Public companies limited by shares have been declining since 2008 and make up only 0.1% of the total number of companies on the register.

The other types of UK company available under the CA 2006 are:

•
private companies limited by shares—see Practice Note: Private companies limited by shares
•
private companies limited by guarantee, which are primarily used by charities and other not-for-profit organisations—see Practice Note: Companies limited by guarantee, and
•
unlimited companies, which are

Jurisdiction(s):

United Kingdom

Key definition:

Shares definition

What does Shares mean?

The CA 2006 merely provides that a share is a share in the company's share capital. A company's share capital comprises the number of shares issued by it to investors either on or after incorporation. Those investors then become the shareholders in the company. A shareholder’s shares are their personal property. By contrast, the assets of a company are owned by the company itself. Owning shares does not entitle a shareholder to any property rights in the company's assets.

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