What is a limited company?
A private company limited by shares is a company owned by its members (shareholders) and run by the directors. The members’ liability is limited to the amount unpaid (if any) on the shares they hold. A company is a separate legal entity, distinct from its shareholders and directors. Amongst the reasons for forming a company are ownership of property, obtaining finance, taxation, status and protection from liability.
A. A limited company is a separate entity created by incorporation at Companies House. Its profits, losses, assets and liabilities are its own. The company is owned by its members (the shareholders) and run by the director (or directors) whose assets are protected from loss if the business should fail. This is sometimes referred to as limited liability. Because a company has a life of its own the business can continue despite the resignation or death of any directors or shareholders and the sale of the business or the introduction of outside investors are simplified. Reasons for wanting or needing a limited company may include ownership of property, obtaining outside finance, taxation, status and protection from risk.
