Company limited by guarantee vs community interest companies: although there are similar elements within companies limited by guarantee and community interest companies, each type of corporate establishment has a collection of unique attributes that may suit a new or existing organisation perfectly. In order to find out about the best possible type of non-profit company registration, the team of experienced and professional specialists at Coddan is available to provide advice that is tailored entirely to your own particular needs and ambitions - we can also put everything in motion once a decision has been made. While both of these types are suitable for non-profit companies and organisations, there are clear benefits to each from a legal point of view.
Within a company limited by guarantee, there is the legal framework to specify a nominal amount that each member is liable for in the event of any debts being accrued. This provides peace of mind to those individuals that form this type of company, and this can be accompanied by strict guidelines that apply to how any profits are distributed. Charitable groups usually need to ensure that a significant proportion of surplus funds is reinvested into the operation, and a company limited by guarantee can be set up to prevent excessive dividends from being payable to members.
A community interest company may be a suitable solution for organisations that need to protect a particular asset (or group of assets), and this objective can be achieved through the use of an Asset Lock. With this legal element in place, it is possible to prevent named assets from being sold or transferred for less than their market value – an exception can be made when another CIC or charitable group is potentially involved in the transaction. When a charity is considering some kind of commercial relationship with a regular business, an Asset Lock can provide additional security in the event that potential operations do not go entirely to plan.