Limited company with new penalty by Democrat (8)

I believe the answer is:

confined

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'limited' is the definition.
('confine' can be a synonym of 'limit')

'company with new penalty by democrat' is the wordplay.
'company with' becomes 'co' (abbreviation. I am not sure about the 'with' bit.).
'new' becomes 'n' (common abbreviation eg NT for New Testament).
'penalty' becomes 'fine' (a financial penalty).
'by' means one lot of letters go next to another.
'democrat' becomes 'd'.
'co'+'n'+'fine'+'d'='CONFINED'

Can you help me to learn more?

(Other definitions for confined that I've seen before include "Enclosed, cramped" , "Restricted" , "Not free to move about" , "deprived of freedom" , "Kept within limits" .)

I've seen this clue in The Times and The Sunday Times.

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