limited company
A type of company incorporated by registration under the Companies Act 2006 whose members have a limited liability in respect of the company’s debts. Most companies are in this category. In a company limited by shares, members must pay the nominal value (see authorized capital) of their shares either upon allotment or subsequently (see call). In a company limited by guarantee (a guarantee company) members must pay an agreed nominal amount (the guarantee) to their company in the event of a winding-up. The guarantee fund is intended to be for the benefit of company creditors and members’ liability to contribute to it cannot be reduced or extinguished by the company. Because payment of the guarantee is postponed guarantee companies often lack a working capital and are therefore more appropriate for charitable or social purposes than for trading. The name of a limited company must end with the words “Limited” (or “Ltd.”) in the case of a private company and “public limited company” (or “plc”) in the case of a public company (or their Welsh equivalents; see Welsh company) as a warning to creditors of the limit upon members’ liability. See also change of name. Compare unlimited company. |