In Zimbabwe, the term «(Pvt) Ltd» refers to a private company with limited share capital. All private companies are regulated by the Harare Commercial Registry. In Canada, a person who wishes to register a limited liability company must file articles with their provincial or federal government. [3] At the time of incorporation, a corporation must choose to use «Limited» (Ltd.), «Incorporated» (Inc.) or «Corporation» (Corp.) in its name. [4] A limited liability company is created when it is incorporated by law. In the United Kingdom, for example, the founder of a limited liability company must: Prior to 1 October 2009, company registration in Northern Ireland was the responsibility of the Department for Enterprise, Trade and Investment (a department of the devolved government). With the entry into force of the Companies Act 2006, the company law previously separate from Northern Ireland was repealed and the new company law introduced by that Act was extended to Northern Ireland. Limited liability companies can be found in most countries, although the detailed rules for them vary greatly. It is also customary to distinguish between public limited companies of the plc type (e.g.
German Aktiengesellschaft (AG), Belgian SA, British public limited company, Czech S.p.A., Hungarian Nyrt. and Spanish, French, Polish, Greek and Romanian companies (SA) and «private» company forms (such as German GmbH, Belgische bv, Portuguese Lda., British Ltd., Polish Sp. z o.o., Russian ООО, Ukrainian ТОВ (TOV), Czech s.r.o., French s.a.r.l., Italian s.r.l., Romanian s.r.l., Hungarian kft., Macedonian ДОО (DOO), d.o.o. Slovenian and Slovak s.r.o. In the United States, corporations have limited liability, and the term corporation is preferred to limited liability company. A «limited liability company» (LLC) is a different entity. However, some states allow companies to have the designation Ltd.[8] (instead of the usual Inc) to indicate their corporate status. A limited liability company must file annual tax returns («corporate income tax returns») with the Securities and Exchange Commission. The shares are sold privately, which limits the amount of capital raised.
All shareholders must agree to sell or transfer shares to someone outside the company. The company can borrow money, but a director must offer a personal guarantee to pay off the debt if the company cannot. The personal property of the director is at stake and is not protected by the law of the limited liability company. If a loan is owed to the company at the end of the year, additional taxes will apply. A director is personally liable if the company becomes insolvent and it does not act in the best interests of creditors. Similar to a limited liability company in the United States, a limited liability company is a separate legal entity from its owners. The organization protects them from liability. In the event that a company experiences financial difficulties or declares bankruptcy, its owners are not personally responsible for the debts. The shareholders of the company are also not liable unless they hold unpaid shares. The shares of the limited liability company are generally not made available to the public. The extent of a shareholder`s liability is limited by the value of his capital contribution to the limited liability company. A private LTD company is a company whose shares are not listed on the stock exchange or whose shares are not made available to the public.
The life of a limited liability company can extend beyond the life of its founders or shareholders. For example, if a shareholder of an ILD. has invested $10,000 in the purchase of shares, he or she has a global liability limited to $10,000. Because an LTD company is a separate entity, it can be bought and sold like any other business asset. How does it work? The owners of an LTD are named, which means that the current owner can change it. Upon transfer, the new Executive Director becomes the owner of the LTD and has the right to access its assets and resources. Even if the founder tried to take over the company, this would only be possible if the current owner agreed. Only those who are registered with an LTD company have the right to govern and administer it – no one else. This provides some commercial protection, especially if the company has trademarks, patents, a reputation or a recognizable mark. You may be wondering: «What does LLC mean,» «Which entity should I choose,» «What is Inc.,» «What does Co. mean,» «What is LLC,» or «Ltd vs.
LLC?» Before you incorporate, you need to choose the type of entity that`s right for you. It`s not something to know, and they don`t teach it in schools.