A limited company (Ltd.) is a company whose practices are limited by English law. There are three main types of limited companies: private limited company by shares, private limited company by guarantee (see also private limited company) and public limited company.

Private limited companies by shares (which correspond to the U.S. Incorporation and the German GmbH) offer several advantages over trading as sole trader (e.g. limited liability).

As a shareholder in a limited company, you can only lose what you have put into the company if it were to go bankrupt (e.g if you bought shares for £50, you can only lose £50). Being a shareholder means you have limited liability.