Benefits to Setting-Up a UK 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.

A company which is limited by guarantee is a separate business corporation from the owners and as such it is the guarantee's LTD company itself which is 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).