A limited by guarantee company is an alternative type of business structure that is normally used by charities and other types of non-profit organisations. Companies limited by guarantee don’t have share capital or shareholders. Instead, they are controlled by one or more ‘guarantors’, each of whom guarantees a fixed sum of money to the business in the event of its insolvency.
Typically, guarantors do not take any profit from the business. All surplus income is kept in the company and used to achieve its non-profit objectives.
Limited by guarantee companies are set up in the same way as limited by shares companies. You can use the services of an online company formation agent to register a ready-to-trade company in under 24 hours. You can also use Companies House Web Incorporation or postal services, but these methods of registration do take significantly longer and cost more.
To complete an online application to register a company limited by guarantee, the following information will be required:
To register a company limited by guarantee, the subscribers (guarantors) must complete a Statement of Guarantee during the company formation process. This is a statutory requirement under section 11 of the Companies Act 2006 and outlines the circumstances under which the guarantors have to pay their guarantees.
Each subscriber named on the memorandum of association must agree to the following Statement of Guarantee:
I confirm that if the company is wound up while I am a member, or within one year after I cease to be a member, I will contribute to the assets of the company by such amount as may be required for:
The amount guaranteed by each subscriber will be outlined in the Statement of Compliance. This will set the limit of their financial liability. In most cases, a nominal value of £1 is agreed by each subscriber. This must be paid when requested by the company.
Each subscriber to the memorandum must sign the Statement of Compliance. This shows that they agree to the Statement of Guarantee and the guaranteed sum.
Rapid Formations provides a comprehensive online formation package for registering a company limited by guarantee in England and Wales, or Northern Ireland in under 24 hours. We provide a standard set of articles of association with this package.
The entire application process is completed online. There is no need to sign any paperwork or send documents by post. As soon as Companies House approves your application, we will send you digital copies of your incorporation documents by email. You will also receive paper copies by post within a few days.
We also provide a range of company address services in London, including a prestigious Registered Office Address, a Service Address and a Business Address.