Limited By Shares

Business, Legal & Accounting Glossary

Definition: Limited By Shares



Full Definition of Limited By Shares


Registered companies that are ‘limited by shares’ are the most common form of registered company. Prior to 1985, it was possible to register a company limited by guarantee (see: Limited by guarantee), but this is no longer possible.

In a company limited by shares, members of the company (usually designated ‘directors’) are liable for the company’s debts only to the extent of the value of the shares they own. Registering a company as limited prevents the directors being made destitute if the company fails, but this peace of mind comes at a price: corporation tax.

Companies limited by shares may be public or private. A public limited company is allowed to offer shares to sale to the public. This is a good way for the company to raise capital, but the option is only open to companies with a share capital of £50,000 or more. A private limited company must have at least two shareholders, but there are few other restrictions on their formation.


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Definition Sources


Definitions for Limited By Shares are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 6th April, 2020 | 1 Views.