Unlimited company


Unlimited company

In the United Kingdom, an unlimited company is a company formed by registration under the Companies Act 1985 where the liability of the members is unlimited - that is, they are liable to contribute whatever sums are required to pay the debts of the company should it go into compulsory liquidation. Not surprisingly, this is not a common form of company. One notable example is The Equitable Life Assurance Society (company number 00037038).

An unlimited company is very similar to a partnership and there are only rare occasions when it will be preferred to that alternative business model. Examples are where the company will not trade (e.g. will only be used to hold title to property), is trading but in an area where limited liability is not acceptable, secrecy concerning financial affairs is desired (an unlimited company can have fewer reporting obligations), there is a low risk of insolvency etc. They can be registered online for fees of approximately £250 plus VAT. However an unlimited company has separate legal personality, unlike a partnership in England and many Commonwealth countries.

Irish subsidiaries of a number of United States of America companies have registered as unlimited companies to shield their finances from public view. Janssen Pharmaceutical, a subsidiary of Johnson & Johnson re-registered as an unlimited company to avoid needing to file annual reports, effective hiding a portion of Johnson & Johnson's financial information.cite web
url = http://www.irishtimes.com/newspaper/finance/2008/0816/1218748038117.html
title = Janssen move keeps financial affairs private
accessdate = 2008-10-03
date = 2008-08-16
last = Carswell
first = Simon
work = irishtimes.com
publisher = irishtimes.com
archiveurl = http://www.webcitation.org/query?url=http%3A%2F%2Fwww.irishtimes.com%2Fnewspaper%2Ffinance%2F2008%2F0816%2F1218748038117.html&date=2008-10-03
archivedate = 2008-10-03
] Apple Computer's Irish division did the same. [cite web
url = http://archives.tcm.ie/businesspost/2006/07/16/story15772.asp
title = Apple firm re-registers as unlimited company
accessdate = 2008-10-03
date = 2006-07-16
last = Daly
first = Gavin
work = ThePost.ie
publisher = The Sunday Business Post
archiveurl = http://www.webcitation.org/query?url=http%3A%2F%2Farchives.tcm.ie%2Fbusinesspost%2F2006%2F07%2F16%2Fstory15772.asp%23&date=2008-10-03
archivedate = 2008-10-03
]

References


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Look at other dictionaries:

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