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Limited company to Unlimited

  • 07-04-2011 7:41pm
    #1
    BenEadir
    Registered Users, Registered Users 2 Posts: 4,539 ✭✭✭


    Hi Guys,

    What are the main reasons (hypothetical or otherwise) why a company would choose to change it's status from Limited to Unlimited?

    What are the advantages/disadvantages for the shareholders of such a change?

    Ben


Comments

  • #2
    [Deleted User]
    Posts: 5,121 ✭✭✭ [Deleted User]


    Privacy I think.


  • #3
    BenEadir
    Registered Users, Registered Users 2 Posts: 4,539 ✭✭✭BenEadir


    Thanks PG,

    So as a shareholder you'd be giving up the benefit of limited liability in return for the increased privacy as a result of not having to file annual accounts?

    Am I correct in assuming if you are a shareholder in an unlimited company you are personally liable on a joint and several basis for the liabilities of the company? :eek::eek::eek::eek:

    Ben


  • #4
    kennyb3
    Registered Users, Registered Users 2 Posts: 6,724 ✭✭✭kennyb3


    All sorts of reasons for and against going from one to the other it all depends on the situation. Do a google.

    http://www.startups.ie/blog/index.php/sole-trader-vs-limited-company/

    http://www.askaboutmoney.com/showthread.php?t=26638

    http://www.askaboutmoney.com/showthread.php?p=161679#post161679

    If you want to discuss this or ask anything please dont hesitate.


  • #5
    tenchi-fan
    Closed Accounts Posts: 3,339 ✭✭✭tenchi-fan


    Companies are usually limited. This means limited liability. The owners of the company are not liable for the debts of the company.

    This is handy for say, a kitchen fitter who has a few customers who refuse to pay for their new kitchen. The kitchen fitter now owes his suppliers tens of thousands but doesn't have the cash to pay it. The company can fold and he will not be liable for the company's debt.

    However, many small business owners need to obtain finance for their business and will sign personal guarantees on loans obtained from the bank. This means they must continue repaying the loan even if the business goes under. As a result they could face personal bankruptcy.

    As for what are the advantages of not trading through a limited company.. possibly more privacy (as he won't have to file annual returns) and less regulation and fees for professional services.


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