A UK unlimited company is a specific form of corporate organization under UK law where the liability of the members or shareholders is not limited. This means that if the company incurs debts or faces legal issues, the personal assets of the shareholders can be used to satisfy the company's liabilities. Here are the key features of a UK unlimited company: 1. **Unlimited Liability**: The most notable feature of an unlimited company in the UK is that the shareholders have an unlimited obligation to cover the company's debts in the event of a winding up. This contrasts with limited companies, where shareholders' liabilities are limited to the amount, if any, unpaid on their shares. 2. **Legal Status**: An unlimited company is a distinct legal entity from its owners, meaning it can own property, sue and be sued in its own name. 3. **Registration and Regulation**: These companies are registered with Companies House in the UK and are subject to the Companies Act 2006, similar to limited companies. However, they have some exemptions from certain disclosure requirements. 4. **Disclosure Requirements**: Unlimited companies may benefit from less stringent reporting and disclosure requirements compared to limited companies. For instance, they might not be required to file annual financial statements with Companies House. 5. **Taxation**: Unlimited companies are taxed similarly to limited companies on their profits. However, the distinction in liability may have implications for tax planning and financial structuring. 6. **Reasons for Choosing an Unlimited Structure**: Businesses might opt for an unlimited company structure for various reasons, including greater privacy due to reduced disclosure requirements, or to demonstrate financial commitment and credibility. They are often used by professional service firms, family businesses, or as subsidiaries of larger corporate groups. 7. **Rarity and Risk**: Unlimited companies are relatively rare in the UK, mainly because of the significant financial risk to shareholders. The unlimited liability aspect means that personal assets of the shareholders are at risk if the company fails, a situation most investors prefer to avoid. In summary, a UK unlimited company offers a unique structure with unlimited liability for shareholders, which can be beneficial in specific circumstances but also comes with increased financial risk.