Benefits of registering a company limited by guarantee in Belfast with Coddan Formations Agency: registering a company limited by guarantee is a common structure for non-profit companies such as clubs, charitable trusts and educational institutions. Such companies are normally required to have a clause in their articles of association, which states that there will be no distribution of profits to its members.
The company limited by guarantee does not have any share capital and its liability is limited to a sum which is guaranteed by its members. Generally, this type of non-profit company registration is favoured by non-for-profit organisations seeking sponsorship or grant funding.
Why do non-profits register as a company limited by guarantee? The main benefit of registering a company limited by guarantee concerns the liability of the people running the organisation. If a non-profit organisation, such as a community project, club or charity, is not set up as a limited company then those people who manage the organisation can be held liable for any of the organisation's debts, should it become insolvent.
Some non-profits are large concerns, with lots of staff, premises and equipment and such liabilities can be considerable. A non-profit may experience sudden financial difficulty if, for example, a key source of funding is withdrawn.
Limited liability: in the case of a company limited by guarantee, the members' liability is limited to the amount of guarantee as stated in the company's articles of association. This is typically a nominal sum of just £1. Further liabilities can only be pursued should the company's insolvency be proved to be the result of wrongdoing on behalf of those members. Clearly this is a much more satisfactory situation and allows those involved in running the company limited by guarantee to concentrate on their activities without fear of severe personal financial consequences.
Partnering with Coddan Formations Agency: those non-profits or individuals registering a company limited by guarantee in Belfast with Coddan benefit from our wealth of experience. Coddan has helped more than 200,000 organisations to be properly incorporated and that expertise is invaluable to our customers.
Ensuring all the correct paperwork, such as the articles of association, are properly set out is a vital step in the proper and legal registration of the guarantee company, and it will save committee members from encountering considerable difficulties and potential liabilities further down the road.