What is ‘Limited’ and ‘Ltd’?

"Limited" and "Ltd" signify the legal structure of a company. When these terms follow a company name, it indicates that the business is a private limited company, functioning as its own legal entity. In this structure, shareholders are only responsible for the company’s financial obligations up to the amount they have invested, should the business face financial trouble.

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According to Section 59 of the Companies Act 2006, most private companies are required to include "Limited" or "Ltd" in their names. However, some businesses may qualify for exemptions and are not obligated to use this suffix.

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The Difference Between ‘Limited’ and ‘Ltd’

The terms "Limited" and "Ltd" refer to the same thing, with "Ltd" simply being a shortened form of "Limited." There’s no legal distinction between the two; it's just a matter of how you want to present your company name.

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The choice between using "Limited" or "Ltd" is largely about personal preference. Some businesses may prefer the formality of "Limited," while others might like the simplicity of "Ltd." Whichever you choose, it must be used consistently as part of your official company name, appearing on all legal documents, such as the Certificate of Incorporation and the Companies House public register.

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Are ‘Limited’ and ‘Ltd’ interchangeable?

Generally, you can use "Limited" and "Ltd" interchangeably without facing significant issues. However, to ensure complete compliance and avoid any potential problems, it's advisable to adhere to the format in which the company was registered.

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One critical situation where you should not switch between "Limited" and "Ltd" is when submitting documents to Companies House. You must use your registered company name, including the correct suffix, precisely as it appears on your Certificate of Incorporation. Failing to do so will result in your submission being rejected.

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Another situation where these suffixes cannot be interchanged is when presenting your company name in specific contexts. You are legally required to display your exact registered name, including "Limited" or "Ltd," in the following scenarios:

• On physical signage (e.g., storefronts or commercial offices)
• At the registered office address or any other location from which the business operates (unless it is your residence)
• On stationery (e.g., business correspondence or websites)
• In promotional materials

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The regulations outlining the requirements for company name disclosures can be found in Part 6 of The Company, Limited Liability Partnerships and Business (Names and Trading Disclosures) Regulations 2015.

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In summary, while "Limited" and "Ltd" can often be used interchangeably, it’s essential to follow the correct usage when dealing with Companies House or displaying your company name in the specified contexts.

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Modifying Your Suffix

When it comes to company names and their associated suffixes, there are several important factors to consider.

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If you’re dissatisfied with the suffix in your company name, you have the option to change it from “Limited” to “Ltd” or the other way around. Companies have the flexibility to alter their name at any time through a special resolution by the members or via any alternative methods outlined in their articles of association. To enact a special resolution and modify your company name, you’ll need at least a 75% majority vote from the members. This resolution can be approved through a written process or during a general meeting.

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For further details on how to change your private limited company, you can visit the gov.uk website.

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Exemptions from Using "Limited" in Company Names

A private company may not be required to include "Limited" or "Ltd" in its name for several reasons, such as:

• The company is structured as a company limited by guarantee.
• The articles of association contain specific provisions, including:
  • An objects clause that indicates the company’s aim is to advance commerce, art, science, education, religion, charity, or any profession.
  • A clause stipulating that all profits generated by the company are to be used exclusively for the purposes outlined in its objects clause.
  • A provision that prohibits the distribution of dividends to members.
  • A stipulation that, in the event of winding up, all assets belonging to the company are to be transferred to an entity with similar objectives or to another organisation with charitable aims.

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For more information on exemptions regarding company names, refer to Section 60 of the Companies Act 2006 and consult the relevant government website.

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Trading Names

Many companies choose to operate under a name that differs from their registered name. This approach can serve various purposes, including marketing or distinguishing between different divisions within the same company.

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If you decide to use a trading name, it should not include any of the following suffixes:

• Limited
• Ltd
• Limited Liability Partnership
• LLP
• Public Limited Company
• PLC

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Additionally, trading names must not resemble or imitate an existing business name or trademark, nor should they include any offensive or sensitive language. For more information on selecting a trading name, you can visit the Companies House website.

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Conclusion

‍The terms "Limited" and "Ltd" essentially convey the same meaning, with "Ltd" being the abbreviated form of "Limited." Both designations indicate the status of a private limited company, and they can typically be used interchangeably. However, it’s important to avoid this interchangeability when communicating with Companies House or when presenting your company name in specific business settings.

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For compliance reasons, it is advisable to use your registered company name as it appears in official documents to prevent any potential issues. If you decide to alter the suffix after your company has been incorporated, you can make that change.

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We trust this brief guide has clarified the use of limited company suffixes for you. Should you have any questions, reach out to our team.