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A Limited Company (by shares) is recognised by the suffix ‘Ltd’ (or sometimes ‘Limited’). For example, NTI Ltd.
Where a company is ‘limited’ it means it is owned by shareholders/members, who have bought into the company by purchasing shares. Usually the abbreviated suffix ‘Ltd’ is used. Shareholders/members then get voting rights on resolutions placed before them at a general meeting. For example, directors may need shareholders to vote and agree changes to the company, or to increase the amount of capital it can raise, or change what it can do for a living, etc.
The word ‘Limited’ refers to the shareholders/members having ‘limited liability’.
They are limited to the unpaid portion of any shares they own in the company. For example, if a shareholder has bought 100 shares in a company at £1 each and has paid £100 for them, they will have no liability in the event of a company being wound-up (in Liquidation). The shares are ‘fully paid up’.
However, if the same shareholder has paid £50 for the 100 shares they effectively owe the company £50, which will be the limit of any potential liability they may have; for example, if the company went into Liquidation and the Liquidator sought to ask them to ‘contribute’ to the company’s debts to the limit of the unpaid amount.
The most this shareholder can be asked to contribute to the Liquidation of that company, should it happen whilst they still owe balance on the shares, is £50.
[See ‘Shareholder/Member’, ‘Limited Liability’ and ‘Liquidation’.]
A limited liability partnership (LLP) is a separate legal entity from its members (partners), who are only liable for the amount of money they invest, plus any personal guarantees. The partnership is incorporated at Companies House, and can only be used by profit-making businesses.
Limited liability partnerships (LLPs) are flexible legal and tax entities that allow partners to benefit from economies of scale by working together while also reducing their liability for the actions of other partners.
