Q:

What is an unlimited company?

A:

Quick Answer

An unlimited company is alternately called an unlimited liability company. It is a hybrid company incorporated either with or without a share capital, but the legal liability of the members or shareholders is not limited. If the company needs money to pay its debts, each of the shareholders is called upon to contribute a fixed amount on each share held by them.

Continue Reading
What is an unlimited company?
Credit: Andersen Ross Stockbyte Getty Images

Full Answer

An unlimited company has all the other features of a private company limited by shares. This type of company is suitable for a business where the risk of insolvency is very low or where it is important not to put the company's account on the public register at Companies House. Many people refer to a sole trader's business or a partnership as an unlimited company, but such businesses are not in fact companies. There are few unlimited companies, but this is because their existence and advantage are not widely appreciated. The joint, several and non-limited liability of the members or shareholders of the company to meet any insufficiency in the assets of the company only applies on the formal liquidation of the company. Unlimited companies are found in the United Kingdom, Ireland, Hong Kong, Pakistan, Nigeria, India, Australia, New Zealand and other jurisdictions where the company law is derived from English law.

Learn more about Corporations

Related Questions

Explore