What is a Company Limited by Guarantee?

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A Company Limited by Guarantee refers to a type of business structure that is 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 of 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. Please watch the video given below for more information:



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