AR Company Formations

Company Limited by Guarantee

Benefits as per Bronze Pack, with company being Limited by a Guarantee and not having a share capital.

A Company Limited by Guarantee is a type of company that does not have  share capital or shareholders and is usually formed to manage a charity or not for profit organisation such as a sports club or political party.

Rather than having shareholders a limited by Guarantee Company will have guarantors (or trustees), such individuals enjoy limited liability status but guarantee to pay a predetermined sum (usually £1.00) in the event of winding up the company.
What is the difference between a Guarantee company and a Company limited by shares?

The trustees of a company limited by guarantee have a list of predetermined ‘objects’ stipulated in their Memorandum of Association, the objects define what the company will do and usually include a clause to restrict the directors from paying out any profits to the trustees, but rather to reinvest any profits in fulfilling the company's objects. Whereas a company limited by shares may elect to undertake any legal trade and can distribute the profits to the shareholders.



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