A limited company is one of the three business structures used in the UK. The business structure allows an individual to create a business as a separate entity. It allows the owner to and any other shareholder to only risk their investment and keep their personal finances protected. Therefore, its popular way to set up a business as it offers protection should the business fail. Any business debts will only have to be paid by the business, not the owner or the shareholders. Whereas a sole trader and the owner are seen as one entity in the eyes of the law, meaning that the owner is responsible for any business debts and failures.