Companies limited by guarantee are most often formed by non-profit organizations such as sports clubs, workers’ co-operatives and membership organizations, whose owners wish to have the benefit of limited financial liability. Companies limited by guarantee does not have any shares or shareholders (like the more common limited by shares structure) but is owned by guarantors who agree to pay a set amount of money towards company debts.

  • In companies limited by guarantee, there will generally be no profits distributed to the guarantors as they will instead be re-invested to help promote the non-profit objectives of the company.
  • If any profits are distributed to the owners, then the company will forfeit its right to apply for a charitable status.
  • All companies limited by guarantee must be registered with Companies House, the Registrar of Companies in the UK.
  • Companies limited by guarantee must have at least one director and one guarantor. A sole individual can run both positions, or there can be multiple directors and guarantors.
  • In companies limited by guarantee information about all directors and guarantors must be available on public record.
  • Companies limited by guarantee must provide the details of their registered office during their process of formation.
  • Companies limited by guarantee are required to file accounts and annual return at Companies House annually.
  • The benefits you get:
    • A company limited by guarantee is a distinct legal entity from its owners, and is responsible for its own debts.
    • The personal finances of the company’s guarantors are protected. They will only be responsible for paying company debts up to the amount of their guarantees.
    • The status “limited” builds trust and confidence amongst clients and investors – this type of professional credibility is valuable and can help a company achieve its objectives more effectively.
  • Companies limited by guarantee is the most appropriate company structure, should you desire to setup any form of non-profit organization for the advantage of individuals, greater society or the local community.
  • This could be a social enterprise, a charity, a club or cooperative, a membership organization or any other type of self-sustaining business enterprise in which your intention is to make income just for the promotion and advancement of the company’s non-profit aims, rather than being a source of earnings for yourself and other members.
  • We at Asma Accountants are providing the service for registering your company limited by guarantee in England and Wales.