Does a Company Name Need to Have Limited or Ltd?

Almost all private limited company names must have 'Limited' or 'Ltd'. Limited companies can trade with the official registered name or use a different business name.

However, Welsh companies with a registered office in Wales must have Limited or Ltd after the business name unless EXEMPTED.

The question of whether they're interchangeable must be lingering in your mind. Yes, you can interchange them, but there are rules to consider when using Limited and Ltd.

When choosing a company name, you must decide whether to use Limited or Ltd after your company name. Some rules that govern the use of Limited and Ltd include uniqueness in a company name. Others forbid the use of sensitive words and expressions.

What Is Ltd. (Limited)?

Ltd. is the typical abbreviation for "limited". It's a corporate structure standard in some countries like the U.K., Ireland, and Canada.

The suffix follows the company name to indicate if it's a public or private limited company.

Shareholders and owners in a limited company have limited liabilities to their original investment.

The owner's private assets aren't at risk if a limited company collapses since the business is a LEGAL ENTITY. It means that a limited company is liable for its debts whenever it faces financial difficulties.

These rules are by section 59 of the Companies Act 2006 for most private companies. But, some private companies that meet specific exemptions don't have to use the suffix. Now that you understand what Limited and Ltd mean in your business name, let's explore the term to determine if they're interchangeable.

Understanding Ltd. (Limited)

A limited company is its own legal entity, whereas a private limited company comprises several members known as shareholders or owners. Shareholders invest in private companies by buying shares.

When you set up a private limited company, the business is separate from those running it.

Company directors are employees who perform ADMINISTRATIVE TASKS like filing taxes and don't need to be shareholders.

Company finances are separate from the owners' to avoid confusion and are taxed separately. The company owns all profits after paying taxes. The remainder is shared among shareholders as dividends where applicable. The remaining money is used as working capital.

A director may only take out funds for a salary, loan, or dividend payment.

Public limited companies (PLCs) are popular in the U.K. Using the PLC abbreviation at the end of a company's name is mandatory. The acronym reminds anyone dealing with the company to know it's public and likely large.

You can list or unlist a PLC on the stock exchange, and they're strictly regulated to declare their true financial worth. The publication of financial health helps current and future shareholders make informed decisions on the company's worth.

Can You Interchange Limited and Ltd?

They generally state that interchanging 'Limited' and 'Ltd' will not cause problems. However, stick to the registered company name to remain compliant and ensure no issues arise with your company.

A scenario where you shouldn't interchange 'Limited' and 'Ltd' is at the Company House when filing documents. It's crucial to use the registered name with the correct suffix like it is on the certificate of Incorporation to avoid rejection.

Another scenario where interchanging of these suffixes can't happen is displaying your company name in particular places. They include the following:

• Physical display signs in commercial offices or shops
• It appears on the company's registered office address or any other address related to the business apart from your residential address.
• On business Stationery like business letters or websites
• Promotional materials

Find the rules on "Names and Trading Disclosure" in part 6 of The Company, Limited Liability Partnerships and Business Regulations 2015.

Other Considerations for Using Limited and Ltd

Besides the list above, you should keep other considerations for the suffix Limited and Ltd in mind.

1. Suffix Change

You can change the suffix in your company name anytime, from 'Limited' to 'Ltd' or vice versa.

For whatever reason, companies can change their name by members' unique or any other way as long as their articles of association allow it.

2. Trading Names

Most companies use their official registered name that ends in 'Limited' or 'Ltd' when trading. If so, the registered company name must appear in full plus the suffix. But you can also trade under another title that doesn't infringe on another company's trademark. A trading name shouldn't have any of the following words or abbreviations:

• Limited
• Ltd
• Limited Liability Partnership
• LLP
• Public Limited Company
• PLC
• Any Welsh matching these English words

Exemption Cases from Including 'Limited' or 'Ltd' in a Company Name

Under section 60 of the Companies Act 2006, limited companies can omit 'Limited' or 'Ltd' on the company name or the Welsh equivalents if:

• The company is a registered charity or limited by guarantee, not limited by shares.
• The company's articles of association state the following:
• Promote or regulate charity, commerce, religion, art, education, science, or any profession.
• The company forbids paying dividends to shareholders
• If the business winds up, its assets will be transferred to another firm with similar charitable objectives.

During the formation of your company, the application form has a section where you can claim an exemption from using 'limited' in a business name.

Here's What You Need to Set up a Limited Company in the U.K.

The process is easy if you have the following to set up a limited company in the U.K.

• A business name and address
• A director and shareholder (can be one or more)
• An agreement for the creation of the company is known as a Memorandum and Articles of Association in writing.
• A list of People with Significant Control (PSC) of the company (over 25% shares or voting rights)

With these requirements, you can register a private limited company at Company House.

Guidelines for Choosing a Company Name

Choosing a company name is an exciting aspect of registering a new company. It's an opportunity to express yourself and be creative in a way that you want other people to perceive your business.

Your company name can encompass the future, and you'll work to fulfil that promise.

How to Select a Company Name

Company House has rules on company formation that you should consider when choosing a name for a new company. Some are obvious, while others aren't.

Although you can change your company name later on, getting it right from the beginning is much better.

Choose a name that gives the right impression to the target audience to help your business grow. Therefore, your business name should be considered. Follow these guidelines to choose your company name.

• It must be unique, like no other existing company name.
• There is no similar company name that's already registered.
• Don't use a dissolved company name.
• Upper and lowercase company names are separate from an existing name.
• Justify Reserved or Sensitive words require justification
• The business name must end with "limited".
• The name can't be abusive, illegal, or offensive.

Form your company with Incorpuk today

At Incorpuk, we will help you file accurate information when you register your company through us. We will help you with incorporation articles, a registered office address, and all you may need to register your company in the UK. Contact our team if you seek any information; we will gladly assist.

Frequently Asked Questions

Can a company not be limited?

A single-owned business set-up has a choice to not have limits on the business name. They conduct business as a sole trader or a registered company.

Can a small company be limited?

A small business can be a private limited company once it's incorporated. As a result, the company can have a separate legal identity and benefit from tax structures that are business efficient.

Can a company have two names?

Your company can only have one "legal" name. However, it can have multiple or Doing Business As (DBA) names. So, if you have other ideas for naming your business, use them as DBAs.

The Bottom Line

Overall, 'Limited' and 'Ltd' are almost identical. Ltd is the short form of limited, and both refer to the status of a private limited company. Both terms can be interchanged unless when contacting Companies House or displaying the company name in specific business locations. However, it's best to stick to the company name as you registered for uniformity and compliance purposes. Hence, you'll avoid unforeseen issues or confusion for your business. Remember, if you want to change the suffix on your business name after Incorporation, you can notify the Companies House. Have any questions on limited company name? Reach out to Incorpuk for answers to all of your questions.