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A limited company is a registered company (see: Registered company) in which the members have only limited liability for debts incurred by the company. Although it is possible for a registed company to be of unlimited liability (see: Unlimited company) this is relatively unusual. In most companies the primary purpose of registration is to achieve limited liability status. This limitation of liability has a price, of course, in the form of taxation.
There are, in theory, two ways in which the limited liability is signified: limitation by shares (see: Limited by shares), and limitation by guarantee (see: Limited by guarantee). The latter is now mostly defunct (but see commonhold association).