Limited company
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.)
Analagous to GmbH and SpA) - 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) (analagous 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
- private unlimited company
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Categories: Corporation stubs | Legal entities | Types of companies