A limited company should have directors and members. The members are normally the shareholders unless the company is limited by guarantee.

A limited company's key feature is that it offers limited liability to its shareholders. The company as an independent legal entity is liable for its debts, not members or directors unless they have committed some fraud in some way. The members' liability is limited and based on paying for their shares.

Though there are several types of limited companies they all conform to same requirements. And they include the following;

Private companies limited by shares

Majority of companies in the trade industry are private companies limited by shares. These types of companies normally have the word 'Limited' or 'Ltd' at the end of their name.

Majority of these private companies limited by shares are normally small. There is no minimum capital requirement for them to operate. A larger number of private limited companies are small or medium sized companies. This simply means that they can file and provide simplified accounts at Companies House not necessarily full accounts.

According to the Constitutional Act 1985, sec 81, a private limited company should not offer shares or debentures to the public. This is exclusively for the public limited company (PLC).

Public Limited Companies (PLC)

This type of a limited company is appropriate for larger businesses which offer shares to the general public. Most public limited companies are converted from private ones.

According to the Constitutional Act 1985, sec 11, sec 101 and sec 118, Public limited companies are required to have a minimum authorized share capital. A quarter and any other share premium of this minimum share capital must be paid up before the company commences trading.

The public limited company is the only type of company that is allowed to raise capital by offering securities either through shares or debentures to the public. This can be done through obtaining a listing on the Stock Exchange.

The major difference between Public limited companies and the private limited companies is that they are more subjectable to strict legal requirements than the former. This is in relation to share capital, directors and accounts.

Companies Limited by Guarantee

This is a private limited company, the only difference is that it does not have a share capital. It is the common type in charities, clubs, some community enterprises and some co-operatives. A number of these companies are in the non-profit sector.

These types of a limited company guarantee limited liability the same way as a company with limited by shares. There memorandum and articles of association postulates that the members of the company should guarantee to pay the company's debts, but this normally up to a fixed amount.

Limited Liability Partnerships (LLP)

This is a relatively new type of a limited company. A limited liability partnership is an independent legal entity that confers full limited liability upon its members. It can be through registration at the Companies House. It should have a minimum membership of two members, however there's no stated upper limit.