A private limited company (Ltd) is a company registered at Companies House whose owners' liability is limited, and which can't offer its shares to the public. You can set one up with a single person as the only shareholder and the only director, and registering online costs £100 as of October 2026.
Most UK small businesses that incorporate end up as a private limited company. The word "private" doesn't mean secret, and "limited" doesn't mean you can't lose anything. Here's what both words mean in law, and what changes if you ever become a PLC.
What "private" means
The Companies Act 2006 defines it by elimination: section 4 says a private company is any company that isn't a public company. In practice the biggest consequence sits in section 755, which says a private company limited by shares must not offer its securities to the public. You can sell shares to people you know, investors you approach and staff, but you can't advertise shares for sale to the general public.
What "limited" means
GOV.UK puts it simply: a shareholder's liability is limited to the amount they originally invested. The detail people miss is that this means the amount they agreed to pay for their shares, paid or not. GOV.UK says shareholders will need to pay for their shares in full if the company has to shut down, which is why many founders choose a low share value, such as £1.
Limited liability protects your personal assets from the company's debts. It doesn't protect a director from their own duties, and it won't help if you personally guarantee a loan or a lease.
Ltd vs PLC at a glance
| Rule | Private limited company | Public limited company |
|---|---|---|
| Minimum directors | 1 (section 154) | 2 (section 154) |
| Company secretary | Not required | Required (section 271) |
| Offer shares to the public | Not allowed (section 755) | Allowed |
| Minimum share capital | None set | £50,000 nominal value (section 763) |
| Can trade on incorporation | Yes | Only after a trading certificate (section 761) |
| Name ending | Limited or Ltd | Public limited company or plc |
The trading certificate rule is the one that surprises people: a company formed as a public company can't do business or borrow until the registrar issues it, and that only happens once its allotted share capital reaches the authorised minimum.
What goes on the public register
This is the trade-off for limited liability. GOV.UK says your registered office address will be publicly available, so don't use your home unless you're happy for it to be seen. Directors' names are public, and each director gives a service address that's public too. Anyone with more than 25% of the shares or voting rights is a person with significant control and is recorded as such. The company's email address isn't published.
How a private limited company is set up
- Choose a name that ends in Limited or Ltd (or Cyfyngedig or Cyf if you registered in Wales) and isn't the same as an existing name.
- Pick at least one director and at least one shareholder. They can be the same person, and there's no maximum number of shareholders.
- Decide your shares: how many, their value, and the rights each class carries. Most companies start with one class of ordinary shares.
- Choose articles of association. Many companies use the model articles.
- Verify identities. GOV.UK says you may need the Companies House personal code from verifying your identity, and every director's code if there's more than one.
- Register online for £100, usually within 24 hours, or by post on form IN01 for £124, which takes 8 to 10 days (both as of October 2026).
You'll usually be set up for Corporation Tax at the same time. My guide on registering a company in the UK walks through the filing screens, and Corporation Tax in the UK covers what you owe once you're trading.
The running costs people forget
Incorporation is the cheap part. Once the company exists, the directors are responsible for keeping its records, filing annual accounts and a confirmation statement, and telling Companies House when officers, shareholders or the registered office change. If you take profits out, they come as salary through payroll or as dividends from profits, not as drawings. None of that's hard, but it's ongoing, and it's the main reason some people stay sole traders for longer.
There's one more thing worth knowing: a company is formed by one or more people subscribing to a memorandum of association under section 7. If you register online, GOV.UK says the memorandum is created for you, and it can't be updated once the company's registered.
Is it the right structure for you?
A private limited company suits you if you want the business's debts kept separate from your own, plan to bring in co-owners through shares, or want a structure investors recognise. The cost is admin: accounts, a confirmation statement and a public record. If you're weighing it against working for yourself, my comparison of sole trader vs limited company sets out the trade-offs.
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My verdict
For most small businesses, Ltd is the sensible default once you're earning steadily. Keep your share value low, keep your home address off the register, and remember the one hard line: you can't offer shares to the public until you become a PLC.
Frequently asked questions
What is a private limited company?
It's a company registered at Companies House that isn't a public company. Its owners' liability is limited and it must not offer its shares to the public.
Can one person run a private limited company?
Yes. GOV.UK says a company can have one shareholder who owns the whole company and acts as its only director.
How much does it cost to set up a private limited company?
As of October 2026, GOV.UK lists £100 to register online, usually within 24 hours, or £124 by post on form IN01, which takes 8 to 10 days.
Does a private limited company need a company secretary?
No. GOV.UK says you don't need a company secretary for a private limited company, while section 271 requires one for a public company.
What's the difference between Ltd and PLC?
A PLC needs at least two directors, a secretary and allotted share capital of at least £50,000 nominal value, and can offer shares to the public. An Ltd needs one director and can't offer shares to the public.
Is a private limited company's information public?
Yes. The registered office address, directors' names and service addresses, and people with significant control are on the public register.
Are shareholders liable for company debts?
Only up to what they agreed to pay for their shares. GOV.UK says shareholders must pay for their shares in full if the company has to shut down.
