Private Company Limited By Shares

A private company limited by shares, usually called a private limited company (Ltd.) (though this can theoretically also refer to a private company limited by guarantee), is a type of company incorporated under the laws of England and Wales, Scotland, that of certain Commonwealth countries and the Republic of Ireland. It has shareholders with limited liability and its shares may not be offered to the general public, unlike those of a public limited company (plc).

"Limited by shares" means that the company has shareholders, and that the liability of the shareholders to creditors of the company is limited to the capital originally invested, i.e. the nominal value of the shares and any premium paid in return for the issue of the shares by the company. A shareholder's personal assets are thereby protected in the event of the company's insolvency, but money invested in the company will be lost.

A limited company may be "private" or "public". A private limited company's disclosure requirements are lighter, but for this reason its shares may not be offered to the general public (and therefore cannot be traded on a public stock exchange). This is the major distinguishing feature between a private limited company and a public limited company. Most companies, particularly small companies, are private.

Private companies limited by shares are usually required to have the suffix "Limited" (often written "Ltd" or "Ltd.") or "Incorporated" ("Inc.") as part of their name, though the latter cannot be used in the UK or the Republic of Ireland; companies set up by Act of Parliament may not have Limited in their name. In the Republic of Ireland "Teoranta" ("Teo.") may be used instead, largely by Gaeltacht companies. "Cyfyngedig" ("Cyf.") may be used by Welsh companies in a similar fashion.


Read more about Private Company Limited By Shares:  Company Officers, Formation

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