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LLC vs LTD: US LLC or UK LTD, Which Should You Form?
An LLC is a US company; an LTD is the private limited company used in the UK and many Commonwealth countries. Both protect their owners and both can be formed from anywhere. Here is how they compare, and how to choose. We form both.
An LLC is a US limited liability company. An LTD is a private limited company, most often a UK LTD registered with Companies House. Both limit your personal liability. The big differences are tax and market: a US LLC is usually a pass-through with simple yearly filings and works best for US customers, Amazon.com and Stripe US; a UK LTD pays UK corporation tax, files public accounts and suits UK and European customers. With LLCPronto, a US LLC starts from $190 and a UK LTD costs $300.
LLC vs LTD at a Glance
| Point | US LLC | UK LTD |
|---|---|---|
| Country | United States (formed in one state) | United Kingdom (Companies House) |
| Owners | Members | Shareholders |
| Run by | Members or managers | Directors |
| Default tax | Pass-through by default | UK corporation tax on profits |
| Yearly filings | State report or fee (varies by state) and IRS forms | Confirmation statement, annual accounts and a corporation tax return |
| Public information | Depends on the state; some keep owners private | Directors and 25%+ owners are on the public register |
| Best market | US customers, Amazon.com, Stripe US | UK and European customers |
| Price with LLCPronto | From $190 | $300, ID verification included |
What Is an LLC?
A US LLC is a company formed with one US state. It protects your personal assets and, by default, passes its profit through to its owners for tax. Non-US owners file Form 5472 and a pro forma Form 1120 each year. See what is an LLC.
What Is an LTD?
LTD stands for “limited”. A UK private limited company is owned by shareholders and run by directors. It is a separate legal person, so shareholders’ liability is limited to their shares. It is registered with Companies House and pays corporation tax to HMRC. Directors do not need to live in the UK. See our UK LTD company formation service.
Tax: LLC vs LTD
This is where the two differ most. A UK LTD is a taxpayer itself: it pays UK corporation tax on its profits, and shareholders may pay tax again when they take dividends, depending on where they live.
A US LLC is not taxed as a company by default. A single-member LLC owned from abroad usually reports to the IRS through Form 5472 and a pro forma Form 1120, and whether any US income tax is due depends on how and where the business earns its money. In both cases, your home country may also tax you, so check local rules. Our tax team, including M. Hassan, CPA, can review your case.
Banking and Payments
- US LLC: opens US business accounts with providers such as Wise and Payoneer, receives Amazon.com payouts in dollars and connects to Stripe US and PayPal US
- UK LTD: opens UK fintech accounts in pounds, uses Stripe UK and suits UK and EU marketplaces such as Amazon UK
Yearly Running Costs and Admin
A US LLC has light yearly admin: keep the registered agent active, file the state report or pay the state fee if your state has one, and file the IRS forms. A UK LTD files a confirmation statement and annual accounts with Companies House and a corporation tax return with HMRC every year, and its accounts are public.
Which Should You Choose?
| Your situation | Best choice |
|---|---|
| Most customers are in the US | US LLC |
| You sell on Amazon.com or need Stripe US | US LLC |
| Most customers are in the UK or Europe | UK LTD |
| You sell on Amazon UK or EU marketplaces | UK LTD |
| You want the simplest yearly filings | US LLC |
| You sell to both markets | Many founders run both |
Can You Have Both?
Yes. Many founders start with the company that matches their first market, then add the other as they grow. Because we form both a US LLC and a UK LTD, we can tell you honestly which one to start with.
Can You Use “Ltd” Instead of “LLC” in the US?
Not as a different type of company. In the US, “Ltd” is not a separate business structure. Some states accept “Ltd.” or “Limited” as a naming ending for an LLC or a corporation, but the company is still an LLC or a corporation under US law. A true LTD is a UK (or similar) private limited company registered with Companies House.
How Profits Are Paid Out
- UK LTD: profits are paid as dividends in proportion to shares, after UK corporation tax
- US LLC: profits can be split however the members agree in the operating agreement, usually by ownership percentage
LLC vs LTD: FAQs
What is the difference between LLC and LTD?
An LLC is a US limited liability company formed with a state. An LTD is a private limited company, usually in the UK. Both limit liability, but they are taxed and regulated differently.
Is an LTD the same as an LLC?
No. They are similar in purpose but come from different countries’ laws. An LLC is American; an LTD is British (or from another country using the same system).
Can a non-resident form a UK LTD or a US LLC?
Yes, both. No residency, visa or visit is needed for either. LLCPronto forms both remotely.
Which is cheaper, an LLC or an LTD?
With LLCPronto, a US LLC starts from $190 and a UK LTD costs $300 including ID verification. A UK LTD also has more yearly accounting work.
Which is better for Stripe?
Choose the country you sell in. A US LLC gets Stripe US; a UK LTD gets Stripe UK. Both are available to owners abroad.
Do I pay tax in the UK with an LTD?
Yes. A UK LTD pays UK corporation tax on its profits.
Can a UK LTD have only one shareholder?
Yes. One person can be the only shareholder and the only director of a UK LTD, just as one person can own a single-member US LLC.
Related Guides
We Form Both: US LLC and UK LTD
US LLC from $190 with EIN in 24 hours. UK LTD for $300 with ID verification included.
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