Accounting terms

Dictionary of all accounting terms

What is a Limited Company?

A limited company is a type of incorporation that limits the amount of liability that a company's shareholders can be held accountable for.

A limited company (LC) is the naming convention used in the United Kingdom. In the United States and other places, it is commonly known as an LLC - a limited liability company.

In a limited company, a distinction is created between the company's debt and that of the shareholders. This is used to protect the individuals from the liabilities of the company.  If the company is sued or under other financial distress as a result of its business, the shareholders' personal assets will not be at risk of seizure.

It is also relatively easy for ownership in a limited company to be transferred.

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