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Limited by guarantee company

What is the difference between limited by guarantee and limited by shares?

Unlike a standard private limited company with shares, a guarantee company has no share capital and no shareholders. Instead it has members who undertake to contribute an agreed nominal amount towards any asset shortfall, if the company is wound up. A non-profit organisation may be in this legal form.

What are guarantors?

Guarantors are individuals or other corporate bodies that provide a cash guarantee for a limited company rather than holding shares. Generally, guarantors do not take any profit from the company.

Who can be a guarantor?

Any individual or another company can be a guarantor.

How many people do I need to set up a limited by guarantee company?

One person can act as both guarantor and director.

Who would form a company limited by guarantee, instead of most common setup with shares?

Non-profit organisations such as membership organisations, clubs and sports associations.

Are the profits paid to the guarantors, as dividends would be paid to shareholders?

No, in most cases the guarantors are not entitled to receive any profits, especially if required by law if they are a charity or have rules in their articles of association.

What must be on an application to register a Limited Company by guarantor?

A Limited Company must have at least one director and one guarantor (who can be same person), and a registered office address in the United Kingdom (that cannot be a PO box.)

How do I set up a company limited by guarantee?

A company must be registered with Companies House, for which you can use our online service.

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