Limited, Business Law and Ethics

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Name to end with the word "Limited":

                            S.5(1)(a) provides that the word "limited" must be the last word of the name of a company which is to be limited by shares or by guarantee. In Durham Fancy Goods Ltd v Michael Jackson (Fancy Goods) Ltd Donaldson, J, stated:

"The word "Limited" is included in a company's name by way of description and not identification. Accordingly, a generally accepted abbreviation will serve this purpose as well as the word in full. The rest of the name, by contrast, serves as a means of identification".

The use of the mystic word "limited' as the last word of a company's name is explicable only in the context of the historical evolution of English Company law. It was prescribed for the first time for English companies in 1856 by the Joint Stock Companies Act of that year and, in the words of Professor Gower, "was intended to act as a red flag warning the public of the dangers which they ran if they had dealings with the dangerous new invention". A member of the public dealing with a business organisation whose name ended with "ltd" was to be made aware that he was not dealing with a partnership and so could only blame himself if he burnt his fingers in the process. Its function may be likened to that of the ring on a married person's finger.


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