What is a company limited by guarantee?
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A company limited by guarantee is a structure where members guarantee to contribute a specified amount (typically £1) if the company is wound up, rather than owning shares. Designed for non-profit organisations, charities, and community groups that reinvest all surplus income into their objectives rather than distributing profits.
How does it differ from a standard limited company?
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Limited by Guarantee: Members instead of shareholders, no profit distribution, non-commercial focus, equal voting rights, charity registration eligible.
Standard Limited Company: Shareholders own shares, dividend distributions, commercial profit-making focus, returns to investors.
Guarantee structure is ideal for social benefit rather than commercial profit.
What types of organisations use this structure?
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Charities, community interest companies, sports clubs, trade associations, educational institutions, religious organisations, arts groups, environmental organisations, research institutes, and community groups. Perfect for organisations with social, charitable, or community purposes.
What's included in our formation package?
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Name check and reservation, specialised Articles of Association, Companies House incorporation, director and member appointments, guarantee amount specification, UK registered office address, digital document delivery, statutory registers, compliance guidance, and mail scanning service.
Can these companies make profits?
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Yes, but profits cannot be distributed to members. All surplus must be reinvested in the company's objectives. Reasonable salaries can be paid for work done, and profits can build reserves or fund assets. All financial benefit must serve the organisation's purposes.
Are these companies eligible for charity status?
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Yes, they're commonly used for registered charities. Can apply for Charity Commission registration if purposes are exclusively charitable, must demonstrate public benefit, receive tax reliefs, eligible for Gift Aid donations, but must comply with both company and charity law.
What are the ongoing compliance requirements?
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Annual confirmation statement and accounts filed with Companies House, maintaining member and director registers, notifying changes, Annual General Meetings (unless exempted), member communications, sector-specific regulations compliance, and potential audit requirements.
How does governance work?
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Member democracy through voting at general meetings, director management of operations, Annual General Meetings for progress review and elections, special resolutions requiring 75% approval for major changes, transparent reporting, director accountability, and professional governance standards.
