Company Limited by Guarantee

An alternative type of incorporation used for non-profit organisations that require corporate status. A guarantee company does not have a share capital, but has members who are guarantors instead of shareholders.

The guarantors give an undertaking to contribute a nominal amount towards the winding up of the company in the event of a shortfall upon cessation of business. It cannot distribute its profits to its members, and is therefore eligible to apply for charitable status if necessary. Common uses of guarantee companies include clubs, membership organisations, sports associations and charities.

• Non-profit corporate entity.
• Suitable for clubs, membership organisations, sports associations etc.
• Can apply for charitable status.
• Members have limited liability.