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This lesson covers the structure and features of limited companies — both private limited companies (Ltd) and public limited companies (plc). You need to understand the process of incorporation, the legal implications of forming a company, and the key differences between private and public companies. This is part of AQA topic 3.1.2.
Key Definition: A limited company is a business that has its own legal identity, separate from its owners (shareholders). This means the company can own assets, enter contracts, sue, and be sued in its own name.
The process of creating a limited company is called incorporation. Once incorporated, the business becomes a separate legal entity — a legal "person" in its own right.
Key Definition: Incorporation is the legal process of registering a business as a limited company with Companies House. This gives the business a separate legal identity from its owners.
To incorporate, the founders must submit:
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