Businesses opt for Limited companies for a number of reasons - it may look more 'professional', it may help if you need to raise external finance, and it may be more tax efficient than other business structures such as sole proprietorship or partnership.
Sole Proprietorship requires only 1 person to start while Limited Company requires at least 2 people. Limited Company is a legal entity whose liability is limited by shares while Sole proprietorship doesn't have any share structure.
Under the limited company structure, your company and personal finances are kept separate, unlike the sole trader structure. A limited company is owned by its shareholders.