What is meant by an Ltd. (Limited)?

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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).

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