A limited company is a type of business structure or company which has a legal identity of its own and is separate from its owners (shareholders) and managers. Their are some differences from country to country
Advantages of a Limited Company
- Limited Liability.
- More credibility
- Access to More Financial Opportunities.
- Claim limited company expenses
- Cheap to setup
- Efficient with tax.
- You Can Set Up a Dormant Company.
- Easily Transfer the Business to Someone Else.
- Better Reputation.
- Protection of your personal assets
- Your Business Name is Protected.
Disadvantages of a Limited Company
- A certain amount of administration or paperwork is involved
- Number of shareholders in a private limited company is limited to 50
- Company needs to be registered
- The legal set up costs can be costly
- Accounts need to be filed every year
- Obtaining finance may be difficult
- Records are publicly available
Types of Limited Companies
Private Limited Company
A private limited company, or LTD, is a type of organisation or small business entity which is run privately by its shareholders and members.
A limited Company must have at least one director and one shareholder. These type of businesses limit their owner liability to their shares and the number of shareholders to 50. They restrict their shareholders from publicly trading shares.
Private limited companies can be categorised as either limited by shares or limited by guarantee
Private Limited Company by Shares
Limited by shares companies are usually businesses that make a profit. This means the company:
- is legally separate from the people who run it
- has separate finances from your personal ones
- has shares and shareholders
- can keep any profits it makes after paying tax
Private Limited Company by Guarantee
Limited by guarantee companies are usually ‘not for profit’. This means the company:
- is legally separate from the people who run it
- has separate finances from your personal ones
- has guarantors and a ‘guaranteed amount’
- invests profits it makes back into the company
Public Limited Company
A Public Limited Company is a company that is listed on a recognized stock exchange and whose shares are traded openly by the public.
Examples of Well Known Public Limited Companies
- Shell Plc
- Barclays Plc
- Vodafone Plc
- Royal Mail Plc
- AstraZeneca Plc
- Lloyds Banking Group Plc
- London Stock Exchange Plc
Limited Liability Companies
A Limited liability Company is a business entity that protects individuals from being liable for the company’s financial losses and debt liabilities
Limited Partnership
A limited partnership (LP) is a company which consists of two or more partners who can be individuals or corporate entities.
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