• A limited company is a separate legal entity and thus distinct from its shareholders and directors, which means that both the directors and the company have completely separate rights and existence's.

• The liability of the shareholder of a limited company is limited to the amount unpaid on any shares issued to them.

• A shareholder cannot be held personally liable for the debts of a limited company.

• Creditors of a limited company can look to the company for payment, which can only be settled out of the company's assets; thus, generally, the personal assets of the shareholders and directors are protected.

• Once your proposed company name is registered as a limited company, the name is protected by law and no one else is allowed to use it in that jurisdiction. This does not usually apply to a business name, as this confers no exclusive or proprietary rights and offers no protection against duplication.

• Operating as a limited company often gives suppliers and customers a sense of confidence in a business. Quite often, larger organisations in particular will prefer not to deal with non-limited businesses.

See also benefits of a PLC Public Limited Company

If you would like any more information about our service, or would like free advice on any aspect of our service, before during or after formation please use the links on the left, or contact us by email or by telephone on 01428 656600.

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