---
title: Limited by Shares Companies
description: Limited by Shares Companies
---
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# Limited by Shares Companies
## The most common company structure in the UK, typically used for businesses that aim to make a profit
### Why a limited by shares company is the most common type of company
- Shareholders have **limited liability**, meaning they are only responsible for the amount they invested in shares. Personal assets such as homes or savings are protected if the company cannot pay its debts.
- The company is a **separate legal entity**, which means it can enter contracts, own property, incur debts, and be held liable in its own right - independent of its owners.
- **Tax efficiency** - owners can pay themselves through a combination of low salary and dividends, with dividends taxed at a lower rate than income tax and not subject to National Insurance contributions, meaning the overall tax burden is typically lower than that of a sole trader.
- Seen as **more credible** to business partners and customers than a sole trader structure.
- Allows the company to **exist indefinitely** - after an original owner retires or dies, making it ideal for family businesses or companies looking to operate for generations.
**💡 Best suited for:** Entrepreneurs, startups, one and two-person businesses, family businesses, and established companies that want to scale and raise investment.
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