Limited company

A limited company is one in which the liability of the shareholders is limited to what they have put in to the company (the money paid to buy their shares). This means that, should the company cause, for example, an environmental disaster and have to pay huge damages, the shareholders will lose only what they put into buying shares, but not their other assets – houses, inheritances, savings, etc.

The business might be liquidated, but the owners are not bankrupted. A public limited company (PLC) has the same limited liability, but its shares are available for trading and their price is quoted on a stock market.

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