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The vast majority of trading companies are private companies limited by shares. There are over two million such companies registered at Companies House. A private company limited by shares must have the word 'Limited' or 'Ltd' at the end of its name. The main advantage of trading through a limited company is to have limited liability.
Many private companies are very small. There is no minimum capital requirement for a private company and it is commonly less than £100. Approximately 90% of private companies are small or medium sized companies which means that they can file modified (i.e. simplified) accounts at Companies House, rather than full accounts.
A private company may not offer shares or debentures to the public: CA 2006, sec755, only a public company (PLC) may do so.
For more advice on the practical aspects of forming a private limited company go to the Incorporation Services Limited website.