Ltd. is a "limited" abbreviation. It is a type of corporate structure available in countries like the United Kingdom, Ireland, and Canada. The term appears as a suffix placed after a company name, which means it's a limited company.
The structure of Ltd.
- A private limited company has one or more investors: shareholders or owners who invest in the company.
- Directors are managers of companies that are consistent with all administrative duties and tax returns.
- The assets of the company are independent of the shareholders and are paid separately.
- The business holds all earnings and pays taxes on them, distributes a part as dividends to shareholders, and maintains the remainder as working capital.
- A director can withdraw funds only for payment, salary or dividend.
- To prevent confusion, the accounts of the Ltd Company must be kept separate from any personal accounts.
How to set up a private limited company?
The following are the requirements for forming a private limited company:
- Company name and registered address,
- At least one director and one shareholder must be there,
- A Memorandum and Articles of association,
- Names of individuals with considerable influence over the company (people with more than 25% of the shares or voting rights).