Companies Limited by Guarantee
This type of company is normally incorporated for non-profit making functions. The company has no share capital. A company limited by guarantee has members, rather than shareholders, the members of the company guarantee /undertake to contribute a predetermined sum to the liabilities of the company which becomes due in the event of the company being wound up, normally £1. The Memorandum normally includes a non-profit distribution clause and these companies are usually formed by clubs, professional, trade or research associations.
A guarantee company has members, rather than shareholders, whose liability is limited by an amount, normally less than a £1, guaranteed by each member, which becomes due in the event of the company being wound up.
Charitable Companies Limited by Guarantee
The Memorandum includes a non-profit distribution clause and these companies are usually formed by professional, trade or research associations. After incorporation the company can be registered with the Charity Commission.
After incorporation the company can be registered with the Charity Commission for charitable purposes.
An alternative type of incorporation used primarily for non-profit organisations that require corporate status. A guarantee company does not have a share capital, but has members who are guarantors instead of shareholders.
The guarantors give an undertaking to contribute a nominal amount towards the winding up of the company in the event of a shortfall upon cessation of business. It cannot distribute its profits to its members, and is therefore eligible to apply for charitable status if necessary. Common uses of guarantee companies include clubs, membership organisations, sports associations and charities.
- Non-profit corporate entity
- Suitable for clubs, membership organisations, sports associations etc
- Can apply for charitable status
- Members have limited liability
- Some input required from client to establish main objects
If you would like to register a charity please go to charity.html