Have you ever seen a company’s name end with Ltd, but are not quite sure what it means? Although this term may just look like random letters, it determines what level of liability your company is obliged to uphold. This Business Kitz blog will talk you through what limited limited means.
What is Ltd?
Ltd is simply an abbreviation for the term ‘Limited’, which refers to limited liability. Limited liability companies are public companies, meaning that the public has a certain degree of ownership within an Ltd company, without the restrictions placed on proprietor companies in regard to share offers. Such companies may or may not be listed on the Australian Stock Exchange, but are required to lodge their annual accounts with the Australian Securities & Investments Commission (ASIC) either way.
What about ‘Pty Ltd’ & ‘Co’?
Yes; you guessed it! More abbreviations relating to liability…
Pty Ltd is the most common structure of a company and is an abbreviation for ‘proprietary limited’. Proprietary companies or private companies may only have up to 50 shareholders. Private companies are only required to have 1 director and are regulated by ASIC. The transfer of shares has to be done via the consent of the shareholders, and shares cannot be offered to the public or fundraised.
Pty Ltd Requirements:
- There is a limit of 50 shareholders who are not employees of the company;
- There must be a minimum of 1 director;
- A company secretary is optional; and
- A registered office is a prerequisite, but does not have to be accessible to the public.
Co is another abbreviation you have most likely seen at the end of a business name. It is short for ‘company’, referring to an association of people working together in a commercial or industrial enterprise. The abbreviation Co., does not carry meaning as a specific legal structure on its own.
It is easy to get these mixed up in all of these abbreviations. But, to misuse these titles is a very serious matter and would constitute a breach of the Corporations Act 2001 (Cth). To avoid facing penalties from ASIC, you should seek legal advice. Our sister company, Legal Kitz, can assist in determining which title your company should be using. Our Legal Kitz business law specialists can assist with ensuring that your concerns are addressed by providing tailored advice. You can book a free 30-minute consultation with our experienced and highly qualified team via our website now.