When setting up a company in the UK, you’ll need to choose a legal structure and decide on a name for your business. One of the common questions business owners face is whether to use 'Limited' or 'Ltd' at the end of their company name. While both terms are widely used and seem the same, understanding their nuances can help you make the right choice for your business.
What does Ltd stand for?
'Ltd' is simply an abbreviation for 'Limited'. The terms 'LIMITED', 'LTD', 'Limited' or 'Ltd' all mean the same thing. In business, both terms refer to a private limited company, which is a popular business structure in the UK.
A private limited company is a separate legal entity from its owners (known as shareholders) and offers limited liability protection. This means that shareholders are only liable for the company’s debts up to the value of their shares, safeguarding personal assets in the event of financial trouble. You can learn more in our guide to the advantages and disadvantages of private limited companies.
Is there a difference between Ltd and Limited?
The short answer: no, there’s no legal difference between the two. Both 'Limited' and 'Ltd' represent the same business structure and carry identical legal implications. In summary:
Limited = The full term
Ltd = The abbreviation
When you register a private limited company with Companies House (the UK’s registrar of companies), you can choose to include either 'Limited' or 'Ltd' in your company name. Whichever you pick, it won’t affect how your business operates or is treated under UK law.
💡Editor's insight: "If your company is registered in Wales and is considered a “Welsh” company, you can use ‘Cyfyngedig’ or ‘Cyf’ instead."
Are they interchangeable?
Yes, 'Limited' and 'Ltd' can be used interchangeably. However, consistency is important. Once you’ve registered your company with a specific name, you should use that version across all official documents, branding, and communications. For example, if your registered name is 'Smith Enterprises Ltd', you can’t use 'Smith Enterprises Limited' on contracts or invoices. Staying consistent helps avoid confusion and ensures legal compliance.
Which should you use at the end of a company name?
Choosing between 'Limited' and 'Ltd' often comes down to personal preference or branding considerations. Ultimately, the choice between them is largely a matter of style and practicality, as both carry the same legal meaning.
1. Professional appearance
Some business owners feel that spelling out 'Limited' gives a more formal or professional appearance, which can be appealing in certain industries like finance, law, or consulting.
2. Conciseness
On the other hand, 'Ltd' is shorter and can make your company name more concise. This can be useful for logos, signage, or other branding materials.
3. Industry norms
Take a look at competitors or other businesses in your industry to see which version is more commonly used. Following industry norms can help align your brand with client expectations.
Are there any exemptions?
According to Section 60 of the Companies Act 2006, some limited companies can remove 'Limited' or 'Ltd' (or the Welsh equivalents) from their name. This applies if:
The company is a registered charity or limited by guarantee (not limited by shares), and
Its articles of association state that the company:
Promotes or supports activities like commerce, art, science, education, religion, charity, or a profession,
Is prohibited from paying profits to shareholders (such as dividends), and
Requires that, if the business is wound up, its assets are passed to another organisation with similar charitable aims.
When forming your company, the application form includes a section for requesting this exemption. You can get help with this through an experienced memorandum and articles of association solicitor.
Charitable companies
Charities that operate as companies limited by guarantee may apply for an exemption from including 'Limited' or 'Ltd' in their name. This exemption is granted if the company:
Exists solely for charitable purposes.
Has a constitution prohibiting the distribution of profits to members.
Public limited companies (PLCs)
It’s important to note that public limited companies use 'PLC' or 'plc' instead of 'Limited' or 'Ltd'. Unlike private limited companies, PLCs can offer shares to the public and are subject to stricter regulations. If you’re not sure whether your business qualifies for an exemption, consulting a legal expert or checking Companies House guidelines can help.
FAQs
Is Ltd short for Limited?
Yes, 'Ltd' is the abbreviated form of 'Limited'. Both terms refer to the same type of business entity - a private limited company.
Can you abbreviate Limited to Ltd?
Yes, you can use 'Ltd' instead of spelling out 'Limited'. However, you must stick to the version you used when registering your company. If your registered name includes Limited you cannot legally abbreviate it to Ltd in official documents.
Does it matter if it’s Ltd or Limited?
From a legal perspective, it doesn’t matter whether you use 'Ltd' or 'Limited', as they both signify the same business structure. The key is to remain consistent with the name registered at Companies House.
Is an Ltd the same as an LLC?
No, an Ltd (private limited company) and an LLC (limited liability company) are different business structures from the UK and the US, respectively. You can learn more in our complete guide to Ltd vs LLC.
Final thoughts
When deciding between 'Limited' and 'Ltd' for your company name, the choice boils down to style and branding preferences. Both options carry the same legal weight and represent the same type of business structure. Remember to stay consistent with the version registered at Companies House to avoid any legal issues.
If you’re unsure about the naming process or need help setting up your company, Lawhive can provide expert guidance to simplify the process. Get in touch today to see how our small business solicitors can help.
References
Gain exemption from requirement as to use of limited or cyfyngedig (NE01) from Gov.UK