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Coddan CPM Ltd. – Company Registration Agent in the UK
Home Non Profit Companies About a Private Company Limited by Guarantee Company Limited by Guarantee Establishment Requirements

Fast and easy formation of companies limited by guarantee across the UK

Company limited by guarantee establishment requirements

 
Non-Profit Company

Company limited by guarantee establishment requirements: a non-profitable association, by and large, is a type of entity best suited to people seeking to set up a not-for-profit organisation. Charities, societies, community initiatives, sports clubs and so on often register as companies limited by guarantee. Organisations of this sort are established as "a company limited by guarantee and not having share capital" so setting up a non-profit company of this sort with Coddan holds a number of advantages for groups with social and/or charitable objectives, rather than financial ones.

The major difference between a company limited by guarantee and other limited companies – namely those limited by shares – is that the former arrangement limits the liability that members bear in the event of the company defaulting on its debts to a far greater degree than the latter. In a company limited by shares the members are liable for losses up to the value they paid for those shares; but in a company limited by guarantee, liabilities are limited to a set 'guarantee' level. This is typically set at £1 per member.

Given this major advantage, a company limited by guarantee gives its members greater safety. Coddan has years of experience helping groups to register non-profit corporations capable of achieving specific aims while protecting members from personal liability – often within 24 hours. This is especially useful for large organisations such as sports clubs, which may plan quite high levels of income and spending, meaning that the potential liabilities incurred under a limited by shares arrangement could be very high.

Companies that establishing in the Great Britain, as limited by guarantee will have articles drafted specifically for the aims and activities of those entities. As well as protection from personal liabilities, the arrangement is often preferred by local authorities, some of which will actually insist that charities or social organisations register as limited by guarantee.

As well as the considerable advantages of operating as this type of corporation, there are drawbacks. As the companies is not limited by shares, they are not allowed to issue shares and therefore have a diminished capacity to raise funds in this way. Non-profitable organisations can still take out loans, however, as well as issuing debentures. However, a number of not-for-profit associations do choose to incorporate their subsidiaries as limited by shares in order to be able to raise additional funding through the direct issuing of shares.

We will establish your new company limited by guarantee from scratch using your own registered office address, and appoint your own candidates to the roles of a director, secretary (if required), and member(s). Upon a company limited by guarantee start-up, these officer(s)' details will be recorded as the original details of your business entity.

Your company name must end with the word 'Limited', or its abbreviation 'Ltd', or the Welsh language equivalents: 'Cyfyngedig', or 'Cyf'. If certain requirements are met however, a company limited by guarantee may apply for and be granted an exemption from using 'limited' (or its Welsh equivalent) in its name.

If you want to a company limited by guarantee to be exempt from use of 'limited' in your corporate' name, we will produce a memorandum and articles of association for you which complies with the above requirements, for an additional fee of £50.00.

Coddan' special drafted and solicitors adopted memorandum and articles of association, which can be used not only in the UK, our own memorandum and articles of association will be very useful and accepted in other overseas countries. We do not use the Companies House' standard model of the memorandum and articles as most of others UK companies formation agents.

When ordering a company limited by guarantee please specify a list of the objects that need to be included to the memorandum of association.

Law requires a company limited by guarantee to have a memorandum of association containing the objects clause. The objects clause delimits the purposes for which the company is formed and also its legal capacity.

Your company limited by guarantee must have a registered office address within England, Scotland or Wales; this is the official address of your company and will be on the public record as such.

Companies House, HMRC, and other authorities will use the registered office address of your company limited by guarantee to send official documents, and they will assume that such documents have been received by the company' officers.

A private company limited by guarantee in England or Wales must have at least one director, one member, and may have a secretary.

You need at least one person to form thr company limited by guarantee. If there is only one director, and that director is a natural person in your firm, that director can also act as the secretary.

This requirement is met if a natural person as a corporation holds the office of director sole or otherwise by virtue of an office.

If you are planning to establish a private company limited by guarantee for the charitable purpose(es), you must appoint three officers as the trustees (directors).

To open your company limited by guarantee in this way, Coddan will work with the director of the company to be, drafting articles appropriate to the organisation and stipulating the director, members and classes of members. Some companies limited by guarantee have non-voting members, for example, while others have different classes of members with restricted rights. There are also many organisations which charge a subscription to members, raising funds and potentially creating another class of membership again.

Organisations of this sort are registered at Companies House, in Cardiff. If you wish to know more about the company limited by guarantee start-up requirements, please contact us.