What Is A UK Limited Company?

May 06, 2015


A limited company is a business which has been registered by such a method as to ensure that its owners have limited liability; to lawsuits or to debts which cannot be paid.

An owner, who is a shareholder (shareholders own the company) is not liable for more than their investment in the event of the insolvency of the company. An owner loses only the value of his investment if the company declares bankruptcy. He would not be personally liable for other outstanding debts. A limited company is designated by “Ltd” (short for ‘Limited’) after its name.

The business is owned by its shareholders but operated by directors, who may or may not be shareholders. A private UK limited company must have at least one director. It needs to issue just £1 of shares to begin trading but it can issue more. Its shares may not be listed on the Stock Exchange; they must instead be offered first to the other directors before being sold privately.

Companies are registered at Companies House. You need an address, a Registered Office, for official correspondence. This can be your home address. Many people prefer to use another address, especially if they move house regularly.

They also may not want their home address in the public record or their tenancy agreement may not allow it.

Some go further and also get a Director’s Service Address; this means that the director’s home address is not in the publicly-accessible record. (“Service” here means ‘where legal documents can be served’.)

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