Company Limited by Guarantee vs Limited Liability Partnership

Company limited by guarantee vs limited liability partnership: when arranging for the formation of a new company limited by guarantee, the overall range of options that is available can make the process seem a little daunting – the team at Coddan can help to make this decision a far more straightforward one. Many individuals often weigh-up the benefits of a company limited by guarantee and a limited liability partnership against each other, and while these both have the potential to be an ideal fit for certain types of organisations, there will usually be one route to formation that stands out as the best possible choice. Once a final decision has been taken, the Coddan specialists can set everything in motion.

At the most basic level, a company limited by guarantee can start off with just a single member, while a limited liability partnership will need at least two partners. Both set-ups can be created to give members/partners a limited amount of personal financial liability if things do not work out, and while a company limited by guarantee may only have members that are liable up to a nominal amount, a limited liability partnership has the flexibility to specify the exact amount that each partner should be liable for.

Another major difference relates to the overall organisation structure of the company or organisation. A company limited by guarantee only presents a limited number of structural options for the general running of the company, while an LLP creation has the potential to be laid out in a number of flexible arrangements. In terms of charitable groups, however, registering an LLP may not be the most suitable route to non-profit business formation, as there are a number of specific benefits that apply when becoming a company limited by guarantee - such as the ability to take advantage of certain tax breaks and accounting procedures.

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