What is a Company Limited by Guarantee?

A company limited by guarantee is a business structure used by charities and not-for-profits that is subject to both company and charity law. Under this model, the company directors serve as the charity trustees. A company limited by guarantee doesn’t have shares. But its members are broadly equivalent to shareholders in a private limited company by shares.

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1. Forming a Company Limited by Guarantee – BENEFITS

By forming a company limited by guarantee, a charity’s trustees protect themselves from personal liability should the charity get into financial trouble.

A company limited by guarantee is a separate legal entity. That means, it’s responsible in its own right for everything it does, and the company’s finances are separate from the finances of the trustees. This gives more protection to the trustees if the company builds up debts that it can’t repay.

The word ‘guarantee’ relates to an agreement by each member to pay a nominal amount to the company if it goes insolvent. Normally, this is just £1.

 

2. Forming a Company Limited by Guarantee – SOMETHING TO REMEMBER

Because a company limited by guarantee is regulated by both Companies House and the Charity Commission, there can be a fair amount of paperwork to stay on top of.

It’s important that you or your company secretary file everything at Companies House on time and in full, or you could find yourself paying off some annoying fines.

 

3. How to Register a Company Limited by Guarantee

To set up a company limited by guarantee, you’ll need to register your company with Companies House. To do this, you should complete an IN01 form. Companies House will want to know:

Make sure to pick a company name that hasn’t been used before. One way is to include the location of your company in the name.

You’ll also need to submit a memorandum and articles of association. These are legal statements signed by the trustees and members of the company that spell out how it will be run.

Once you have all the information you need, you can register your company limited by guarantee online with Companies House. With our company formation packages, this is quick and simple. There are four packages to choose from:

  • E-Formation (£9.99): perfect if you want to secure a company name and don’t need any official printed documents.
  • Essential (£19.99): offers you complete confidence that you’re starting a company limited by guarantee with the rules and regulations covered.
  • Entrepreneur (£59.99): kick-start your next big venture with official compliance and additional documents of incorporation.
  • Super (£89.99): the complete secretarial and compliance package to establish your company on a robust footing.

Best of all, when you sign up for one of our company formation packages, we pay the £12 Companies House filing fee for you!

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Quick and efficient mail forwarding and junk mail filtering. No additional handling or postage fees.

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Registered office address:

On the public register, use our address as the business’s registered office address

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Mail forwarding:

Quick and efficient mail forwarding and junk mail filtering. No additional handling or postage fees.

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