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
-
Cash ISAs: why it could be your last chance to grab 5% tax-free savingsSavers using a cash ISA could face a double-whammy of interest rate cuts and tax reforms from April. Should you act now?
-
Navigating the Trump tariffsMartin Connaghan and Samantha Fitzpatrick, Co-Managers of Murray International Trust PLC, discuss Donald Trump's tariffs.
