1. The Owners Are the Shareholders
In a private limited company (Ltd), ownership lies with the shareholders. These are individuals or entities that own shares in the company. Each share represents a portion of ownership.
- If one person holds all the shares, they own 100% of the company.
- If multiple shareholders exist, ownership is divided based on the number of shares each one holds.
2. Shareholders vs. Directors
- Shareholders own the company.
- Directors manage the company.
Sometimes, the same person can be both. For example, a sole founder may be the only shareholder and the only director, especially in small or startup companies.
3. Can Anyone Be a Shareholder?
Yes, any individual or legal entity (like another company) can be a shareholder, as long as:
- They agree to hold shares under the company’s articles of association
- They accept the rights and responsibilities tied to those shares
4. Registering Shareholders with Companies House
When a company is incorporated in the UK:
- Initial shareholders (also known as subscribers) are listed during formation
- All shareholders owning more than 25% of shares must be listed as Persons with Significant Control (PSC)
- Changes in ownership must be reported to Companies House
5. How Ownership Can Change
Ownership can shift through:
- Selling or transferring shares
- Issuing new shares to new or existing shareholders
- Inheritance or as part of a legal agreement
These changes require proper documentation and updates to Companies House.
6. What Do Shareholders Control?
Shareholders have certain rights, including:
- Voting on major company decisions (like appointing/removing directors)
- Receiving dividends (if declared)
- Accessing company accounts and reports
- Approving changes to the company’s structure or shareholding
Frequently Asked Questions
1. Who owns a private limited company if there are multiple shareholders?
Ownership is shared based on the number of shares each person holds.
2. Can a director own a private limited company?
Yes. A director can also be a shareholder, owning part or all of the company.
3. Is a private limited company owned by the government?
No. It’s owned privately by its shareholders, not by the government or the public.
4. Can a private limited company have just one owner?
Yes. A sole shareholder can fully own a Ltd company and also act as its only director.
5. Are shareholders liable for company debts?
Generally no. A limited company is a separate legal entity, and shareholders’ liability is limited to their investment in the shares.
6. Where is ownership recorded?
Ownership details are recorded in the company’s register of members and filed with Companies House.
Conclusion
A private limited company is owned by its shareholders, who may also serve as directors. Whether it’s a solo entrepreneur or a group of investors, ownership is defined by shareholding. Understanding this structure is key to managing control, responsibilities, and company growth.