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
-
Older renters £2,000 worse-off than homeowners – the risks of renting in retirementThere are financial risks to renting in your golden years, research suggests
-
Waspi women targeted in fake compensation scamThe Waspi campaign has warned of a steep rise in fraudulent websites which claim compensation is available for 1950s-born women affected by state pension age changes
