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An unlimited company or private unlimited company is a hybrid
company A company, abbreviated as co., is a legal entity representing an association of people, whether natural, legal or a mixture of both, with a specific objective. Company members share a common purpose and unite to achieve specific, declared ...
(
corporation A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and re ...
) incorporated with or without a share capital (and similar to its
limited company In a limited company, the liability of members or subscribers of the company is limited to what they have invested or guaranteed to the company. Limited companies may be limited by shares or by guarantee. In a company limited by shares, the liab ...
counterpart) but where the
legal liability In law, liable means "responsible or answerable in law; legally obligated". Legal liability concerns both civil law and criminal law and can arise from various areas of law, such as contracts, torts, taxes, or fines given by government agen ...
of the members or
shareholder A shareholder (in the United States often referred to as stockholder) of a corporation is an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the legal ow ...
s is not limited: that is, its members or shareholders have a joint and several non-limited obligation to meet any insufficiency in the assets of the company to enable settlement of any outstanding financial liability in the event of the company's formal
liquidation Liquidation is the process in accounting by which a company is brought to an end in Canada, United Kingdom, United States, Ireland, Australia, New Zealand, Italy, and many other countries. The assets and property of the company are redistri ...
.


Characteristics

The joint and several non-limited liability of the members or shareholders of such an unlimited company to meet any insufficiency in the assets of the company (to settle its outstanding liabilities if any exist) applies only upon the formal liquidation of the company. Therefore, prior to any such formal liquidation of the company, any creditors or security holders of the company may have recourse only to the assets of the company, not those of its members or shareholders. Until such an event occurs (formal liquidation), an unlimited company is similar to its counterpart—the limited company, in which its members or shareholders have no direct liability to the creditors or security holders of the company during its normal course of business or existence. Unlimited companies are found in the
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and ...
,
Ireland Ireland ( ; ga, Éire ; Ulster-Scots: ) is an island in the North Atlantic Ocean, in north-western Europe. It is separated from Great Britain to its east by the North Channel, the Irish Sea, and St George's Channel. Ireland is the s ...
,
Hong Kong Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China (abbr. Hong Kong SAR or HKSAR), is a city and special administrative region of China on the eastern Pearl River Delta i ...
,
Pakistan Pakistan ( ur, ), officially the Islamic Republic of Pakistan ( ur, , label=none), is a country in South Asia. It is the world's fifth-most populous country, with a population of almost 243 million people, and has the world's second-la ...
,
Nigeria Nigeria ( ), , ig, Naìjíríyà, yo, Nàìjíríà, pcm, Naijá , ff, Naajeeriya, kcg, Naijeriya officially the Federal Republic of Nigeria, is a country in West Africa. It is situated between the Sahel to the north and the Gulf of ...
,
India India, officially the Republic of India ( Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on th ...
,
Australia Australia, officially the Commonwealth of Australia, is a sovereign country comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands. With an area of , Australia is the largest country b ...
,
New Zealand New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and over 700 smaller islands. It is the sixth-largest island countr ...
and other
jurisdiction Jurisdiction (from Latin 'law' + 'declaration') is the legal term for the legal authority granted to a legal entity to enact justice. In federations like the United States, areas of jurisdiction apply to local, state, and federal levels. Jur ...
s where the company law is derived from
English law English law is the common law legal system of England and Wales, comprising mainly criminal law and civil law, each branch having its own courts and procedures. Principal elements of English law Although the common law has, historically, ...
. They can also be found in
Germany Germany,, officially the Federal Republic of Germany, is a country in Central Europe. It is the second most populous country in Europe after Russia, and the most populous member state of the European Union. Germany is situated betwee ...
,
France France (), officially the French Republic ( ), is a country primarily located in Western Europe. It also comprises of overseas regions and territories in the Americas and the Atlantic, Pacific and Indian Oceans. Its metropolitan area e ...
,
Macao Macau or Macao (; ; ; ), officially the Macao Special Administrative Region of the People's Republic of China (MSAR), is a city and special administrative region of China in the western Pearl River Delta by the South China Sea. With a popu ...
,
Czech Republic The Czech Republic, or simply Czechia, is a landlocked country in Central Europe. Historically known as Bohemia, it is bordered by Austria to the south, Germany to the west, Poland to the northeast, and Slovakia to the southeast. The ...
and in three jurisdictions in
Canada Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...
(
Alberta Alberta ( ) is one of the thirteen provinces and territories of Canada. It is part of Western Canada and is one of the three prairie provinces. Alberta is bordered by British Columbia to the west, Saskatchewan to the east, the Northwest Ter ...
,
British Columbia British Columbia (commonly abbreviated as BC) is the westernmost Provinces and territories of Canada, province of Canada, situated between the Pacific Ocean and the Rocky Mountains. It has a diverse geography, with rugged landscapes that include ...
, and
Nova Scotia Nova Scotia ( ; ; ) is one of the thirteen provinces and territories of Canada. It is one of the three Maritime provinces and one of the four Atlantic provinces. Nova Scotia is Latin for "New Scotland". Most of the population are native Engl ...
), where they are called unlimited liability corporations. In the
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and ...
, the "private unlimited company" is formed or incorporated by registration under the Companies Act 2006, of which there are a few thousand such companies on the register, similar in volume to the
public limited company A public limited company (legally abbreviated to PLC or plc) is a type of public company under United Kingdom company law, some Commonwealth jurisdictions, and the Republic of Ireland. It is a limited liability company whose shares may be fre ...
, but in contrast to the millions of private limited companies registered. An unlimited company has the benefit and status of incorporation, the same as its limited company counterpart. Situations for which an unlimited company will be preferred to an alternative business model or its limited company counterpart include these: * secrecy concerning financial affairs is desired, effectively shielding and protecting its financial affairs from public, media and competitor analysis, making them non-public information, including shareholder
dividend A dividend is a distribution of profits by a corporation to its shareholders. When a corporation earns a profit or surplus, it is able to pay a portion of the profit as a dividend to shareholders. Any amount not distributed is taken to be re-i ...
payments: a United Kingdom unlimited company, unlike its limited company counterpart, is by the very nature of its legal liability generally not required to publish or make public its company financial statements (file its annual financial accounts at
Companies House Companies House is the executive agency of the company registrars of the United Kingdom, falling under the remit of the Department for Business, Energy and Industrial Strategy. All forms of companies (as permitted by the Companies Act) are ...
). * the company is active or trading in an area where limited liability is not acceptable, vital or practical, but perpetual succession is important. * extending, in general, a greater assurance and confidence to
creditor A creditor or lender is a party (e.g., person, organization, company, or government) that has a claim on the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided some property ...
s and trade
financial transaction A financial transaction is an agreement, or communication, between a buyer and seller to exchange goods, services, or assets for payment. Any transaction involves a change in the status of the finances of two or more businesses or individuals. ...
s, in contrast to its limited company counterpart. * there is a low risk of insolvency for creditors. * the company or its trading activities has or generates sufficient capital, funds or financing without need to approach general lenders such as high-street retail banks. * developing more advantageous company and business capital strategies in an ever-increasing irreversible trend of bank disintermediation by companies and their management. * a focused higher standard of
board of directors A board of directors (commonly referred simply as the board) is an executive committee that jointly supervises the activities of an organization, which can be either a for-profit or a nonprofit organization such as a business, nonprofit orga ...
and executive management behaviour (or probity) and
business model A business model describes how an organization creates, delivers, and captures value,''Business Model Generation'', Alexander Osterwalder, Yves Pigneur, Alan Smith, and 470 practitioners from 45 countries, self-published, 2010 in economic, soc ...
for risk management. * a flow-through entity is required for United States federal tax purposes, under the entity classification rules. Once formed or incorporated, an unlimited company can, in some jurisdictions, also re-register and designate itself to limited company status at any time with few formalities, the same also extending to a limited company, which may at any time re-register and designate itself to unlimited company status.


Examples


United Kingdom

An unlimited company in most jurisdictions is not required under company law to add or state the word Unlimited or its abbreviations (Unltd., Ultd., UC or ULC) at the ending of its legal company name, making its formation status not easily recognisable without first reviewing its
certificate of incorporation A certificate of incorporation is a legal document/license relating to the formation of a company or corporation. It is a license to form a corporation issued by state government or, in some jurisdictions, by non-governmental entity/corporation. Its ...
or government registry status. , 10,890 unlimited companies were incorporated in the UK and listed in the publicly available
Companies House Companies House is the executive agency of the company registrars of the United Kingdom, falling under the remit of the Department for Business, Energy and Industrial Strategy. All forms of companies (as permitted by the Companies Act) are ...
database. Notable examples in the United Kingdom include the following: * the UK
subsidiary A subsidiary, subsidiary company or daughter company is a company owned or controlled by another company, which is called the parent company or holding company. Two or more subsidiaries that either belong to the same parent company or having a s ...
of the international retail clothing group C&A (UK company number 00524665) *
Land Rover Land Rover is a British brand of predominantly four-wheel drive, off-road capable vehicles, owned by multinational car manufacturer Jaguar Land Rover (JLR), since 2008 a subsidiary of India's Tata Motors. JLR currently builds Land Rover ...
(UK company number 04019301), formerly an unlimited company until 4 October 2013 * GlaxoSmithKline Services Unlimited (UK company number 01047315) part of GlaxoSmithKline plc * The Equitable Life Assurance Society (UK company number 00037038) * Credit Suisse International (UK company number 02500199), the United Kingdom investment banking arm of Credit Suisse * the publishing company of British author Ian McEwan (UK company number 07473219) * C. Hoare & Co (UK company number 00240822), England's oldest privately owned bank * Coutts & Co (UK company number 00036695), a private bank incorporated in 1692 and now part of
NatWest Group NatWest Group plc is a British banking and insurance holding company, based in Edinburgh, Scotland. The group operates a wide variety of banking brands offering personal and business banking, private banking, investment banking, insurance and ...
* The Office of David Cameron (UK company number 10421190), a company for the business affairs of the former UK Prime Minister
David Cameron David William Donald Cameron (born 9 October 1966) is a British former politician who served as Prime Minister of the United Kingdom from 2010 to 2016 and Leader of the Conservative Party from 2005 to 2016. He previously served as Leader o ...
, was incorporated in 2016 as a private limited company but has been an unlimited company since 15 April 2020.) The directors of an unlimited company are not generally required to file annual accounts.


Republic of Ireland

In the
Republic of Ireland Ireland ( ga, Éire ), also known as the Republic of Ireland (), is a country in north-western Europe consisting of 26 of the 32 counties of the island of Ireland. The capital and largest city is Dublin, on the eastern side of the island. ...
, local subsidiaries of a number of
American American(s) may refer to: * American, something of, from, or related to the United States of America, commonly known as the "United States" or "America" ** Americans, citizens and nationals of the United States of America ** American ancestry, p ...
companies have registered as private unlimited companies, enabling them to shield their finances from public disclosure, media and competitor analysis. Janssen Pharmaceutical, a subsidiary of its US parent company
Johnson & Johnson Johnson & Johnson (J&J) is an American multinational corporation founded in 1886 that develops medical devices, pharmaceuticals, and consumer packaged goods. Its common stock is a component of the Dow Jones Industrial Average and the company i ...
, re-registered as an unlimited company to avoid the requirement to file annual financial accounts at the Companies Registration Office (CRO) of Ireland, thereby effectively also protecting a portion of Johnson & Johnson's financial information. A number of Irish
European Union The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been ...
subsidiaries of Apple Inc. did the same, such as Apple Sales International and Apple Retail Europe, as have a number of other Irish European Union subsidiaries of American companies, such as Etsy,
Google Google LLC () is an American multinational technology company focusing on search engine technology, online advertising, cloud computing, computer software, quantum computing, e-commerce, artificial intelligence, and consumer electroni ...
, Dropbox,
LinkedIn LinkedIn () is an American business and employment-oriented online service that operates via websites and mobile apps. Launched on May 5, 2003, the platform is primarily used for professional networking and career development, and allows job se ...
and
Airbnb Airbnb, Inc. ( ), based in San Francisco, California, operates an online marketplace focused on short-term homestays and experiences. The company acts as a broker and charges a commission from each booking. The company was founded in 2008 b ...
Ireland UC.


Other regions

Some other global trading companies such as Mobil Producing Nigeria Unlimited (a subsidiary of Exxon Mobil) and Texaco Overseas (Nigeria) Petroleum Company Unlimited (part of the merged
Chevron Chevron (often relating to V-shaped patterns) may refer to: Science and technology * Chevron (aerospace), sawtooth patterns on some jet engines * Chevron (anatomy), a bone * '' Eulithis testata'', a moth * Chevron (geology), a fold in rock ...
and
Texaco Texaco, Inc. ("The Texas Company") is an American oil brand owned and operated by Chevron Corporation. Its flagship product is its fuel "Texaco with Techron". It also owned the Havoline motor oil brand. Texaco was an independent company un ...
petroleum conglomerates) exist in Nigeria, amongst others. In the USA, another example is the American Express Company, which once was a publicly traded unlimited liability company, re-incorporating itself with limited liability company status only in 1965.


References

{{reflist Types of business entity