Limited company
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A limited company is a company whose practices are limited by English law. There are three main types of limited companies which are set up by the Memorandum of Association & Articles of Association:
- private limited company by shares (Ltd.)
- private limited company by guarantee
- These companies do not have share capital but are guaranteed by its "members", who agree to pay a fixed amount in the event of the company's liquidation. Commonly used for charitable purposes.
- public limited company (PLC).
- Public limited companies by shares (plc) (analogous to the U.S. Incorporation and the German AG) offer several advantages over trading as sole trader (e.g. limited liability).
As a shareholder in a limited company, you can only lose what you have put into the company if it were to go bankrupt (e.g if you bought shares for £50, you can only lose £50). Being a shareholder means you have limited liability.
See also
Links
- Limited liability company (http://www.businesslink.gov.uk/bdotg/action/detail?r.l3=1073865730&r.l2=1073859215&r.l1=1073858808&r.s=sc&type=RESOURCES&itemId=1073789612)