What is a Limited Liability Company?

A Limited Liability Company is a company where the owners of the company are typically not liable for the debts of the company.

In the UK, the rights of Limited Liability Companies are defined in the Companies Act 2006. The key characteristics include:

1. Limited Liability: Shareholders' liability is limited to the amount unpaid on their shares. Personal assets are protected from company debts.
2. Separate Legal Entity: The company exists as a separate legal person from its owners and can:
   • Enter into contracts
   • Own property
   • Sue and be sued
   • Continue existing even if ownership changes
3. Types of Limited Companies:
   • Private Limited Company (Ltd): Shares cannot be offered to the public
   • Public Limited Company (PLC): Can offer shares to the public
4. Management Structure:
   • Must have at least one director
   • Must have at least one shareholder
   • PLCs need at least two directors
5. Compliance Requirements:
   • Must file annual accounts
   • Must file confirmation statements
   • Must maintain statutory registers
   • Must have a registered office in the UK
6. Naming: Must include 'Limited' or 'Ltd' (or 'Public Limited Company'/'PLC' for public companies) in the company name.

Limited liability protection can be lost in cases of fraud, wrongful trading, or if directors give personal guarantees for company debts.