Limited by Guarantee are most often formed by non-profit organisations such as sports clubs, workers’ co-operatives, and membership organisations.
A company limited by guarantee does not have any shares or shareholders but is owned by guarantors who agree to pay a set amount of money towards company debts.
All profits will be re-invested to help promote the non-profit objectives of the company.
No profits will be distributed to guarantors.
Why would I incorporate a company limited by guarantee?
This is for non-profit organisations such as sports clubs, community centers, and worker co-operatives.
If your company has the purpose of raising money to promote a cause rather than taking profits then you would set up this type of company.
Who owns a company limited by guarantee?
- This company would be owned by guarantors who do not own shares in the company and do not take any profit.
- The guarantors would agree to pay a sum of money known as a ‘guarantee’ if the company has any debts or becomes insolvent.
Who can be a guarantor?
- This can be any person or a corporate body.
- Their details will be registered with Companies House and displayed on public record.
How many people are required to register a company limited by guarantee?
- You will need at least one director and one guarantor.
- One person can assume both positions.