A shareholder owns and controls a limited company through the purchase of one or more shares. A director is appointed to manage a company on behalf of its shareholders. Whilst the roles of directors and shareholders are completely separate and very different, it is normal for one person to hold both positions. Alternatively, a limited company can have multiple directors and shareholders, who may or may not be the same people.
To set up a limited by shares company in the UK , you must incorporate (register) a company with Companies House . This can be done online through a company formation agent, which is the most popular option, or directly at Companies House.
You will need at least one shareholder, one director, and one issued share per shareholder. However, you can also register a company with multiple shareholders, directors, and shares.
Before setting up a UK limited company, it is important to be aware of your duties and legal obligations as a director and/or shareholder.
If a company is owned and managed by a sole director and shareholder, that one individual will possess all of the aforementioned rights and be responsible for carrying out all duties. This means that one person will have full ownership and complete control of the company.
You can also set up a limited company with other shareholders and/or directors, and appoint new directors and shareholders at any time after company formation. There is a great deal of flexibility with this type of legal structure, which is why it is one of the most popular choices for new and established businesses of all sizes.