In the UK, there is no such thing as a limited liability company (LLC). The term has no legal basis here and originates primarily from United States law. Most people who use it are actually referring to a private company limited by shares, which is the most common limited liability business structure in England and Wales. This article will explain the difference between LLCs and private companies limited by shares before exploring the concept of limited liability and companies.<\/p>\n\n\n\n
A limited liability company, commonly abbreviated as an LLC, is primarily a creature of the United States. It does not have any legal basis in England and Wales. <\/p>\n\n\n\n
Nonetheless, it is a common term many people unwittingly use to refer either to a private company limited by shares or, more generally, the concept of limited liability.<\/p>\n\n\n\n
We will first explore the concept of limited liability before examining what a private company limited by shares is. <\/p>\n\n\n\n
The foundation of the English legal system largely rests on two key concepts:<\/p>\n\n\n\n
We commonly think of ownership in terms of property, such as owning:<\/p>\n\n\n\n
Likewise, we think of liability in terms of risk, such as the liability you may owe another person if you somehow injure them. <\/p>\n\n\n\n
However, these concepts are much broader. From a legal perspective, ownership refers to any right another person has in any asset, i.e. anything capable of holding value. Assets include houses, cars, art, and less tangible items like company shares, bank accounts, and the debts you are owed. <\/p>\n\n\n\n
Likewise, liabilities refer to the debts you owe others and certain promises you have made that have legal effects. For example, promises captured in contracts and deeds, and the legal consequences of your actions if you cause another person loss. <\/p>\n\n\n\n
Naturally, all humans have the right to own property and enforce their rights against other persons. Perhaps that is why the law considers us \u2018natural persons.\u2019 <\/p>\n<\/div>\n\n\n\n
Non-natural persons, commonly called \u2018legal persons,\u2019 refer to entities with broad entitlements to do the same things natural persons can: owning property in their own name and assuming liabilities. <\/p>\n\n\n\n
Under English law, the most common kind of legal person is the private company limited by shares (\u2018limited company\u2019 or \u2018private company.\u2019)<\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n