Under the Companies Act 2006 (CA 2006) a private limited company can be re-registered as an unlimited company provided that:
- All the members of the company have assented to its being so re-registered,
- The company has not previously been re-registered as limited, and
- An application for re-registration is delivered to Companies House in accordance with section 103 of the CA 2006 together with the other documents required by that section, and a statement of compliance.
Section 103 of the CA 2006 sets out the requirements in relation to the application to re-register and accompanying documents. The application is made using Companies House Form RR05 and it must contain a statement of the company's proposed name on re-registration and must be accompanied by:
- The prescribed form of assent to the company being re-registered as an unlimited company,
- A copy of the company's articles of association as proposed to be amended, and
- A statement of compliance.
The company must also make such changes in its name and articles of association as are necessary in connection with its becoming an unlimited company. The only 'necessary' changes are to remove the 'Limited' or 'Ltd' ending (or the Welsh equivalent) from the company's name and to remove any provisions relating to the limited liability of members in the company's articles of association. If the company only makes changes that are 'necessary' special resolutions to amend the articles and the company's name will not be required.
However if the company wishes to make additional changes to its name and/or articles of association beyond what is 'necessary' or, the company chooses to adopt a new set of articles of association upon re-registration (please note that there are no model articles for unlimited companies) the company will have to obtain authority of its members by passing special resolutions.
Since re-registering a private limited company as an unlimited company changes the nature of each shareholder's investment by removing the limit on their liability, the CA 2006 requires each and every member of the company to assent to the re-registration. In other words the assent of all the members of the company to re-registration as an unlimited company is required. The form of assent prescribed by legislation must be used for this purpose and must be signed by all members, or on their behalf, to indicate their consent.
The statement of compliance is included within the Form RR05 and is a statement confirming that the requirements of the CA 2006 in relation to the re-registration have been complied with.
An unlimited company is a company whose members are not limited in their liability to contribute to the obligations of the company on winding-up. In other words members of unlimited companies do not enjoy the protection of limited liability. Despite unlimited companies not being popular compared to limited companies they provide some advantages namely: privacy and flexible capital maintenance rules.
Unlimited companies can keep financial details private as they are not required to file accounts with Companies House. They need only produce accounts for their members. Also unlimited companies are not restricted by the same rules regarding capital maintenance which apply to limited companies in order to protect their creditors.
Please note that an unlimited company cannot be a public company. Also, once a company has been re-registered as unlimited it cannot re-register to regain limited status.
If Companies House is satisfied that a private limited company is entitled to be re-registered as an unlimited company it will issue a certificate of incorporation, which will state that it is issued on re-registration and set out the date on which it is issued.
This Re-registration of a Private Limited Company as an Unlimited Company Pack contains all the documents necessary to re-register a private limited company as an unlimited company; it contains:
- Form RR05
- Prescribed Form of Assent
- Board Minutes
- Special Resolutions - to be used where the company makes changes to its name and/or articles of association that are beyond what is 'necessary'.
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