Definition

Noun: A limited company is a type of corporate structure where the company is a legal entity separate from its owners (shareholders). The key feature is that the liability of the shareholders is limited to the amount of capital they have invested in the company. This means their personal assets are protected from the company's debts and financial obligations.

Usage

A limited company is a formal business structure. It is often abbreviated as "Ltd." (in the UK and many Commonwealth countries) or "Inc." (incorporated, in the US and other regions) after the company name.

Examples

• "She decided to set up a limited company to protect her personal savings from business risks."
• "The small firm was restructured into a limited company to attract outside investment."
• "As a shareholder in a limited company, his maximum potential loss was the value of his shares."

Advanced Usage

• "Private Limited Company (Ltd.)": A company whose shares are not publicly traded and are often held by a small number of individuals.
  • The family business operates as a private limited company.
• "Public Limited Company (PLC)": A company whose shares can be bought and sold by the public on a stock exchange.
  • After its successful IPO, it became a public limited company.

Variants and Related Words

• Limited Liability Company (LLC): A hybrid business structure common in the United States that combines the pass-through taxation of a partnership with the limited liability of a corporation. While similar in the liability aspect, its tax and operational rules differ from a standard limited company.
• Incorporation (n.): The legal process of forming a corporate entity, such as a limited company.
• Shareholder (n.): An owner of shares in a limited company.

Synonyms

• Corporation: A broader term for a company or group of people authorized to act as a single entity, often with limited liability.
• Incorporated company: A company that has undergone the process of incorporation, granting it a separate legal identity.

Related Phrases

• "Limited liability": The legal principle defining the protection for a company's owners. This is the core concept behind a limited company.
  • The main advantage of this structure is limited liability.
• "To incorporate" / "To form a limited company": The act of legally creating a limited company.
  • They chose to incorporate to secure funding.

Noun

1. a company that is organized to give its owners limited liability