What is Limited Companies? Limited companies are incorporated business or corporations. They are set up as legal entities and exist quiet separately from their owners.

Limited Companies are often Family Business or a smaller unincorporated business

Dhunseri Tea Company Ltd. A Limited companies have Ltd. At the end of its company name. Stating that the company is a Limited company.

Bentley Motors Ltd. Aston Martin Lagonda Ltd. More examples of Limited Companies

Who own these companies?  There are the Shareholders and the Owner itself. The shareholders own the companies as well because whether they invest the company, they will own a part, or share of the company.  They are responsible for its own affairs and debts.  Owners and Shareholders of the business have limited liability for debts of business.  Owners and Shareholders can own property, employ people. They also pay the tax.

Types of Limited Company  Private limited company  Number of Shareholder may be restricted. Shares cannot be shared without agreement with all of the share holders.  Public limited company  Larger than private. Shares may be freely bought and sold to the country in which the company registered.

General principles of both public and private are similar throughout the world Specific legislation is different though in some country. EG: Bermuda

Limited Company around the World  Ltd. (English speaking countries)  Pty Ltd (Australia and South Africa)  SA (Europe)  KK, YK (Japan)

Having your own limited company? How do you make one?

Few steps to get Limited  Register to the local Registrar of Companies  Provide legal documents showing its purpose and structure of the business, its aim and goals as well. A list of people related to the companies should be stated aswell.  Once approved, the company now is Limited and are enabled to start trading. The company must create accounts for the public to inspect.

The power of Sharing  Share is part of the company.  Each share allows that person to have the power to vote on running the company.  More share a person have, the more he/she can influence the company. If the person have half the shares in the company, he/she controls almost everymove from the company.

Source of Capital Most capital comes from selling shares. For a private limited company, the amount of money that can be raised is limited by the small number of shareholders. A limited company can also raise money by borrowing money from banks and other financial institutions.

What happens if things go wrong? When a company gets into debt and is unable to pay the debt, its creditors can sue the company to recover their money. If no solution can be found, the company will go into liquidation and the assets of the company will be sold.

Public Limited Companies Public limited companies can freely trade their shares and they are able to sell their shares to the general public. By doing this, they have potential access to limitless funds which can be used to develop the business. Example: ASDA, Tesco, and other supermarkets, NatWest, and other banks.

Reasons Behind Going Public Most companies decide to go public to gain access to an almost limitless source of capital. Many businesses are able to find expensive development and expansion programmes by issuing more shares.

Advantages and Disadvantages of Private Limited Company AdvantagesDisadvantages Incorporated businessComplicated to set up Owners have limited liabilitySubject to more legal constraints Access to greater sources of fundingRequires expensive administration As a separate legal entity has continuity of existence and can be transferred to new owners Decision-making may be slower Needs approval of other shareholders to sell shares

Advantages and Disadvantages of Public Limited Company AdvantagesDisadvantages Incorporated businessComplicated to set up Owners have limited liabilitySubject to more legal constraints Access to greater sources of fundingRequires expensive administration As a separate legal entity has continuity of existence and can be transferred to new owners Slow decision-making due to its size No restrictions on buying and selling shares Separation of ownership from control may lead to conflict of interests between business and its owner The directors may be voted out of office at a shareholders’ meeting, leading to lack of management continuity May be liable to takeover

Activity By going public, the business is able to gain access to more source of capital. It will be able to fund expensive development of chocolate-making and be able to grow and expand due to selling its share to the public. However, by going public, the business will be vulnerable to takeover. Decisions may also be made by the shareholders and due to the large size of the business, it will be slow.