Limited By Shares (LTD)

What Is Limited by Shares company?

Kalina Kar

Last Update 7 months ago

Limited by Shares is a separate unit formed by directors and shareholders. Any assets that the company owns belong to the company and not you personally. Meaning, that if the company encounters financial problems, gets sued, or will be involved in fraudulent activities, as long as you are not involved, the company is considered as a separet entity and your personal assets are protected. 

When setting up LTD company in the UK you must have at least 1 director and 1 shareholder, however one person can perform both positions. 

The role of the director in the company is to run the business on a daily basis, whereas the shareholder is the owner.  

You must register your business with Companies House, as this is a legal requirement. When registering LTD you need to provide Registered Office Address and Trading Address. The Registered Office address must be a physical address in the Uk, and the Trading address is the address from where your company will be operating from. Note: Registered Ofiice address will act as your company's official address and will be available online, as well as directors' and shareholders' details. 

Also, when submitting your application to Companies house, you will have to provide a SIC code (Standard Industrial Classification), which will state the nature of your business. You can use from 1 up to 4 SIC codes on the application.

It's a legal requirement to sign Memorandum and Articles of Association by all the members of the company. In a brief, this document confirms the position of each member in the company, individual responsibilities as well as how the company will be run and owned.


When your company is live and ready to trade you will need to open the company's business account. Even as an owner of the company, you cannot use your own bank account as it has to belong solely to the company. 

It is highly recommended to use an accountant for your limited company. An accountant will take care of your accounts, vat obligations, will manage your profits, and minimize your taxation. It is not a legal requirement, but In the long run, an accountant will save you time and money. 

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