Why Are British Companies All 'Limited'?

Why is it every time see a British corporations name, it has “limited” or more correctly “Ltd.” in the title? For example: Acme, Ltd. Exactly how are they liimited? Are they limited in size? In what they can sell? What?

Thank you in advance to all who reply :slight_smile: :slight_smile: :slight_smile:

I hate to just post a link, but this Wiki article pretty much explains it all. Most large UK companies are of the form “ACME plc”.

They’re not all Ltds, some are PLCs. :slight_smile:

In any case, England and most Commonwealth countries and many US states permit the formation of Limited companies which have shareholders and limited liability, but whose shares can not be sold on the public market.

British companies are “Limited” for the same reason as U.S. companes are “Incorporated” – it stands for “Limited Liability Company (or Corporation).” I.e., if Sir Nigel Richdude, with several billion pounds, owns 100 shares of Wolverhampton Microwave Fabricators, Ltd., which sold you a defective microwave which destroyed your laptop sitting on the counter next to it while you nuked a cuppa, you cannot sue Sir Nigel for all his net worth – all you can sue is the corporate person Wolverhampton Microwave, for whatever the courts will award you from the company’s assets.

It’s not really true to say that the Ltd “stands for” Limited Liability Company. The name of Acme Ltd is Acme Ltd, and that is not an abbreviation for Acme Limited Liability Company.

Rather, by law a limited liability company must have “Ltd” or “Limited” at the end of its name so that people it is trading with know that it is a limited liability company.

That’s a bit of a nitpick, since you get to essentially the same answer to the OP, but there you go.

Finally, another subtle nitpick is that the appellation “limited” derives in particular from the limited liablity of the investors (shareholders) not the company. Legal entities (such as companies) can only ever be sued for what the company has: the difference with a limited form of company is that the shareholders’ liability is limited to the face value of their investment. Again, the nitpick leads to the same answer, but it helps to understand the bigger picture if you understand the distinction, particularly when you start to consider partnerships and so on.