03: Private unlimited companies

Private unlimited companies, which have no limit to the liability of members, are rare and are normally created for a specific reason. Every member in an unlimited company is liable for the obligations of the company in the event of its winding up.

This type of company, which may or may not have a share capital, can be appropriate if a company is merely being used to hold land or other investments and is not trading as such.

An unlimited company is not required to deliver copies of its annual accounts and reports to Companies House, provided it meets certain conditions directed at ensuring that it is not a subsidiary or parent of a limited concern.

The Companies Act generally allows one or more individuals to form a private company by subscribing to its memorandum of association. However, an unlimited company must have at least two subscribers.