What is the Difference Between Incorporated and Limited?

The main difference between "Incorporated" (Inc.) and "Limited" (Ltd.) lies in the ownership structure and the type of liability protection they offer. Here are the key differences:

1. Ownership: An Incorporated company (Inc.) is owned by its shareholders, while a Limited Liability Company (LLC) is owned by one or more individuals.
2. Liability Protection: Both Inc. and Ltd. provide limited liability protection for their owners, which means that the owners' personal assets are separate from the business's debts and liabilities. This protection helps safeguard the owners' personal assets from claims made by the business's creditors or any lawsuits against the business.
3. Business Structure: An Inc. is a corporation, which operates according to its corporate bylaws and has more formal requirements than an LLC. An LLC, on the other hand, is a more flexible business structure with fewer formal requirements.
4. Taxation: Corporations and LLCs may have different tax implications, depending on factors such as the number of owners and the business's income. It is recommended to consult a licensed CPA or attorney for tax advice specific to your business.

When choosing between an Inc. and a Ltd., it is essential to consider your business goals, the number of owners, and the desired level of formality and taxation. Both structures offer benefits, such as personal liability protection for their owners and the ability to establish credibility and professionalism.

Comparative Table: Incorporated vs Limited

The main difference between an incorporated and a limited company lies in the legal structure, liability protection, and taxation. Here is a comparison table highlighting the differences:

An incorporated business is a separate legal entity from its owners and provides financial protection to them from the company's liabilities. It has its own assets, financial obligations, and legal liabilities, allowing owners to have limited liability protection for their personal assets.

A limited company, on the other hand, provides limited liability protection to its directors and shareholders, but not to its owners. This structure is mostly used in European countries and Canada. It can be set up as private companies or public companies, with some having limited liability to specific predetermined amounts.

In summary, an incorporated business offers limited liability protection to its owners, directors, and shareholders, while a limited company offers limited liability protection to its directors and shareholders. Incorporated businesses can also be parent companies, whereas limited companies cannot.