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.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Barclays begins paying up to £100 compensation to customers after banking outageBarclays will pay up to £7.5 million in compensation to customers after its banking services were disrupted by an IT outage
-
Review: Shangri-La Paris – an ode to the world’s best foodNatasha Langan enjoys fine French and Chinese cuisine at the Shangri-La Paris
