THE WORD "LIMITED"

Waipa Post, Volume XXIV, Issue 1681, 3 November 1925, Page 5

THE WORD "LIMITED"

ITS USE IN BUSINESS

A correspondent recently wrote to the Mercantile Gazette asking if a trader carrying on business as an individual who added the word "Limited " to his name could do so without committing an offence. It is, of course, most unusual to find the expression used except in association with a registered company, but until our Act is brought into line with English company law it would appear that every .person can, without being liable to a penalty, trade under any name he chooses to select.

It is different in England, as the Act there restricts the use of the word '< Limited" So registered companies only, and renders it imperative on their part to adopt it as the terminal word of the company's name. Should any private individual use the word he commits an offence, and is liable to a penalty of £5 per day for so doing. The object in all countries where incorporated companies have legal recognition in compelling notice to be given is to protect creditors and other persons dealing with the company. The addition gives notice that business with the company does not create privity of contract between the creditor and the individual shareholders. The word " Limited " stands out like an electric sign and conveys a warning that creditors can have no resort against anyone hut the company. Under the circumstances it seems strange, yet it is a fact, that the limited companies can obtain credit more readily than an individual who is liable to his creditors for every penny he possesses. This may possibly be traced to the special safeguards which the laws of the land have instituted for the protection of tlhose dealing with limited companies. Presumably the only reason an individual would have for tacking the word "Limited" to his name would be a belief that the addition lent some prestige to his business title. It should not have any definite bearing on his business transactions.