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Coddan CPM Ltd. – Company Registration Agent in the UK
Home Non Profit Companies Company Limited by Guarantee Formation in UK Benefits to Setting Up a Company Limited by Guarantee

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Benefits to setting up a company limited by guarantee in United Kingdom

Setting Up a Company Limited by Guarantee

Benefits to setting up a company limited by guarantee: opening a limited by guarantee company in United Kingdom can be incredibly beneficial – particularly if your organisation is not-for-profit (such as a sports club or private members’ club). Entities which are limited by guarantee do not have shareholders or shares; instead, they are owned by one or more guarantors who agree in advance to pay a set amount of money towards any debts accrued by the firm.

An organisation which is limited by guarantee is a separate legal entity from the owners and guarantors, and as such it is the guarantee company itself which is responsible for debts. This is beneficial as it protects company owners from losing their own personal capital in the event of accruing any major debt - guarantors will only be responsible for covering the amount of their guarantee. Many organisations will agree this guarantee to be an arbitrary amount (for example £1) in order to ensure guarantors aren’t out of pocket in the event of a company failing.

Furthermore, having a company with a limited status helps to create trust among potential customers or clients - it’s professional accreditation and can go some way towards helping your company limited by guarantee achieve its goals and objectives. This can be invaluable for charitable organisations seeking to accrue funding, as most funding bodies will consider a company to have more stability and structure than standard voluntary organisations.

By registering a company limited by guarantee, you are essentially creating a separate legal entity which can enter into leases, hold property and even employ people in its own name, regardless of whether the directors change, as directors don’t hold the titles to land (although any change of director should be notified to Companies House).

With Coddan, the setting-up costs are low, making company limited by guarantee startup an attractive proposition. If you’re considering registering a non-profit business, we can offer packages suited to the needs of your business or organisation, meaning you can get incorporated in no time at all. For further information on how Coddan can provide your complete company limited by guarantee registration solutions, simply contact us and a member of our friendly and experienced experts will be happy to help.