What Are The Main Features Of A Limited Company?
Features of a Limited Company A limited company is what a lawyer calls “a creature of statute”. Simply, it exists within a strict legal framework. If you want to create, operate, or close a limited company, then you have to comply with all the legal requirements. The “limited” means that the liability of the owners of the company is limited. Here is an example: Suppose three people each put £x into a new company to start a new business. The business trades profitably for 5 years. The profits are paid to the shareholders as dividends (and directors’ fees). The company makes a loss and is unable to pay its debts. The directors have not behaved unlawfully. In these circumstances, ordinary creditors of the company cannot claim more than the value of what is in the company, that is the money value of its assets, when sold by a liquidator. Of course if the company goes bust most creditors more than likely receive nothing. This is the single biggest attraction of operating a business through
