LTD
Whenever you come across a company with “LTD” in the name, you are looking at a business using a limited company structure. The point of an LTD is to help UK-based companies separate the business from the owner so that there is a legal barrier between the two, especially with finances.
What is the Full Meaning of LTD?
LTD is not an acronym. It is a natural shortening of the word “Limited.” A company using the LTD has limited liability protection. The various shareholders (typically owners) are only liable for the debts or investments in the company, not their own assets.
The goal of the LTD definition is to separate the company from the owner so that if a lawsuit or other legal action is taken, the owner’s personal assets are well protected.
What Type of Company is a LTD?
The LTD meaning applies to two common forms of companies. These include a private limited company or a public limited company. Most of the LTDs you will come across refer to a private entity where the shares are not traded in a public forum. It is common to see such entities in small to medium-sized organisations (SMEs), as the owners have more control.
A PLC is different. These LTD entities trade on the stock market and sell ownership shares to raise funds. The result is a good balance between ownership control and funding flexibility.
When to Use LTD in Practice?
The best time to stick to the LTD definition when running a business is when registering a company in the UK. You’ll need to include the “LTD” on your paperwork, company name, and various communications. That transparency is what gives investors, stakeholders, and any other professional contacts more confidence in the company’s structure.
What is an Example of a LTD Company?
When you are considering what type of business ownership is a LTD, take a look at companies like Dyson LTD and Virgin Atlantic LTD. Both of these entities are private limited companies, utilising the LTD meaning to operate while limiting financial exposure. Even though smaller companies can use LTD, both examples are so big now that they are household names.
Final Thoughts
Starting a private limited company can take a bit of work, especially if you are new to the UK registration process. While an LTD is a wonderful way to boost your financial protection and public confidence, you may want to consider having a professional service complete the paperwork on your behalf.
Opening a business account with Omega ensures all the paperwork is filed properly. You receive a multi-currency account with full international payment options, accounting, legal services, and virtual office capabilities from the Business-in-a-Box option. Learn more about how to create a new LTD for your purposes by signing up with Omega today!