limitedcompany

A limited company is a business entity whose owners have limited liability for the company's debts. It is a separate legal person from its owners, capable of owning property, entering contracts, and suing or being sued in its own name. The owners' liability is generally limited to the amount they have invested or agreed to contribute.

Limited companies are common in many jurisdictions and are identified by the words 'Limited' or abbreviations such as Ltd or PLC in the company name. The legal forms vary: 'limited by shares' with owners as shareholders, and 'limited by guarantee' often used for non-profit purposes. In the United States, the closest equivalents are corporations and limited liability companies (LLCs).

Creation and regulation involve registration with a national or regional registrar, such as a Companies Registry, and the preparation of constitutional documents (articles of association or operating agreement). The company maintains a separate bank account, keeps accounting records, and files annual accounts and confirmations of compliance. Directors manage day-to-day affairs, while shareholders own the company.

Advantages include protection of personal assets, easier access to capital, and potential perpetual existence. Disadvantages include regulatory compliance costs, potential double taxation in some systems, and loss of personal control if ownership is broad. Transfer of shares can complicate control, and the company must adhere to ongoing reporting and governance standards.

Limited company structures are favored for businesses seeking limited risk and the ability to raise capital, but they require ongoing compliance and governance.