What Are The Different Types of Limited Companies
A limited company is a form of corporation in which its members are limited to what was invested or guaranteed by them to the company. These companies can be limited to shares or guarantees.
Examples of some of these limited companies we know include Quora, Google, Facebook, Apple (corporations), BP, and many more. Some advantages of limited companies include protection through limited liability, Tax, and National insurance efficiency, easy to incorporate, low set up costs, and many more. Everything with an upside also has a downside, some of which include subjecting company name to certain restrictions, and it is more complex and time-consuming.
Some types of limited companies include Private companies, limited by share(LTD), Private company, limited by guarantee(LTD), Limited liabilities partnership(LLP), a public limited company(PLC), private unlimited company.
PRIVATE COMPANY, LIMITED BY SHARE(LTD).
LTD is a type of limited company under the private limited company where its shares aren't offered to the general public. In this type of private limited company, the liabilities of the shareholders of the company are limited to the capital that was originally invested. Some advantages include limited liability of its shareholders, restricted trade of shares, separate personality. Some disadvantages also include, registration is usually lengthy and requires a minimum number of two persons to act as directors and shareholders (Division of ownership).
PRIVATE COMPANY, LIMITED BY GUARANTEE.
It is a type of corporation used mainly for and by nonprofit organizations. It does not usually have a share capital or shareholders but instead has members who act as guarantors. These guarantors give the undertaking to contribute a bimodal amount in the event of the winding-up of the company. Some advantages include, guarantors are not personally held for any of the company's debt. Any person or cooperate body can be a guarantor.
PUBLIC LIMITED COMPANY (PLC)
PLC is a kind or type of limited liability company in which its share can be sold and traded to the general public. It means that its securities are traded on a stock exchange and can be bought and sold by anyone. Some advantages of public limited companies include raising share capital. Shareholders can buy and sell their shares. While some high costs and greedy shareholders.
LIMITED LIABILITY PARTNERSHIP (LLP)
LLP is a type of limited company where all or some of its members have limited liabilities. Limited liabilities, therefore, can showcase some elements of a partnership. Some examples include partnerships among physicians, attorneys, accountants, and many more. They allow partners to benefit from their 'economy of scale' by working together while reducing the liabilities for other partners' actions. Some advantages include flexibility roles for partners, ease of formation, pass-through Tax, they have limited legal responsibility.
PRIVATE UNLIMITED COMPANIES
Even though some informed scholars argue against its uniqueness and legality as a type of limited company, it made our list. It is a company that can be incorporated with or without share capital, but the legal liability of the members or shareholders is mainly limited. Some advantages include confidentiality and management quality.
We've not just mentioned the different types of limited companies, but also we've given a clear insight into what every one of them is, its advantages or upsides and some of its downside. I also hope for those who are going into the business world, that this article has and will be of some help to you.