Unlimited companies


Published by a ½Û×ÓÊÓƵ Corporate expert
Practice notes

Unlimited companies


Published by a ½Û×ÓÊÓƵ Corporate expert

Practice notes
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This Practice Note summarises the main features of an unlimited company and why an unlimited company might be used as a vehicle to carry on a business as opposed to a limited company.

What is an unlimited company?

An unlimited company is a private company whose members are not limited in their liability to contribute to the obligations of the company on winding up. An unlimited company cannot be a public company.

An unlimited company may or may not have a share capital. If it does have a share capital, the shares will be used to provide working capital and to measure each members' rights in the company, but it will not act as a limit on the liability of the members.

Why incorporate as an unlimited company?

The members of unlimited companies do not benefit from one of the deemed key advantages of incorporating a company (as opposed to trading as self employed or as a partnership): limited liability. This means that if the company were to be wound up, the members themselves would be responsible for the debts, obligations

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Jurisdiction(s):
United Kingdom
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Key definition:
Unlimited company definition
What does Unlimited company mean?

A company is an unlimited company if there is no limit on the liability of its members. The unlimited liability of its members is the main disadvantage of carrying on business through an unlimited company.

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