Limited liability company
A limited liability company is a separate legal entity whose owners normally have limited liability. The company's assets and liabilities belong to the company as a distinct entity. Shareholders invest capital and may receive distributions subject to the relevant rights and legal rules. The term and legal details vary internationally, so avoid assuming one jurisdiction's company or tax regime. Directors manage the company's affairs, subject to their duties and applicable governance arrangements.
Worked example
A company can borrow in its own name.
Common mistake
Do not assume US LLC tax treatment applies everywhere; company law varies by jurisdiction.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | K1 | Direct | July 2027–August 2028 |
| CIMA | BA3 | Direct | Official assessment-window verification pending |
| CIMA | BA4 | Direct | Official assessment-window verification pending |
| FIA | FFA | Direct | September 2026–June 2027 |
Related terms
Also called: Limited company, Limited liability companies