Limited company

From Wikipedia, the free encyclopedia

Categories: Economics and finance stubs | Legal entities | Types of companies

Companies law
Image:Scale of justice 2.svg
Basic forms:
Sole proprietorship
Partnership (General · Limited · LLP)
Corporation (LLC · S · C)
Cooperative
United States:
Business trust LLLP · Series LLC Delaware corporation Nevada corporation
European Economic Area, including European Union:
SE · SCE
United Kingdom / Commonwealth / Ireland:
Limited company (By shares · By guarantee) (Public · Proprietary) Community interest company
Civil law countries:
AB · AG · ANS · A/S · AS
K.K. · N.V. · OY · S.A. · GmbH
Doctrines
Corporate governance
Limited liability · Ultra vires
Business judgment rule
Internal affairs doctrine
De facto corporation and corporation by estoppel
Piercing the corporate veil
Rochdale Principles
Related areas of law
Contract · Civil procedure

A limited company in the United Kingdom is a corporation whose liability is limited by law. There are three main types of limited companies which are set up by the Memorandum of Association & Articles of Association:

private company limited by shares (Ltd.)

Similar to Pty. Ltd.
private company limited by guarantee

This type of company does not have share capital but is guaranteed by its "members", who agree to pay a fixed amount in the event of the company's liquidation. Frequently charities incorporate using this form of limited liability. Another interesting example is the Financial Services Authority.
public limited company (PLC).

Public limited companies can be publicly traded on a stock exchange (similar to the U.S. Corporation and the German AG).

A shareholder in a limited company, in the event of its becoming insolvent (equivalent to bankruptcy in the US) would be liable to contribute the amount remaining unpaid on the shares (usually zero, as most shares are issued fully paid). 'Paid' here relates to the amount paid to the company for the shares on first issue, and not to be confused with amounts paid by one shareholder to another to transfer ownership of shares between them. A shareholder is thus afforded limited liability.

A limited company can be registered in England and Wales, Scotland, Northern Ireland or Australia. The registration of companies in Great Britain (England, Scotland and Wales) is done through Companies House. The registration of companies in Northern Ireland is done through the Department of Enterprise, Trade and Investment.