What is one advantage of a limited company

A limited company can be either public or private and its main advantage is that it's incorporated status gives the owner a form of protection meaning that their legal identity and the companies legal identity are separate on paper. This means that their liability is limited and if the company goes under, they do not lose any of their own assets, only the share capital in the company or the share holders funds. If they didnt have this and were a sole trader they would be at risk of losing all of their personal assets aswell as the companies assets if it went bankrupt.

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Answered by Megan L. Business Studies tutor

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