What is a Company Limited by Guarantee?

A Limited by Guarantee Company refers to a type of business structure designed for non-profit organisations that produce income for community-based, charitable or social objectives.

• It is ideal for charities, social clubs, sports associations, cooperatives, and membership organisations.
• Every profit generated by the company is used for the good of the company.
• A company limited by guarantee must be enrolled with Companies House.
• A company limited by guarantee can be operated by anyone who wants to set up a non-profit organisation and social enterprise, either individually or jointly.
• It protects individual liability and boosts the professional integrity of their business enterprise.
• It should have at least one director and one guarantor.
• Director and guarantor can be the same person.
• There can be one or more directors and guarantors in the company.
• It is the ownership of guarantors who pay an agreed amount of money towards the company's debts.
• Directors run the business operations and financial investments.
• There is no share or shareholder in this type of company structure.
• It should have a registered office address in the country of incorporation.