Yearly requirements to maintain a non-profit firm: many people who run non-profit organisations have found that opening a limited by guarantee company is an ideal way to put their organisation on a more effective corporate footing, while retaining the benefits of limited financial liability.
A limited by guarantee company has no shareholders, but is instead owned by guarantors, who commit to paying a set amount towards the company debts. The precise amount to be guaranteed is set out in the company’s founding documents, and beyond that, the personal finances of the guarantors are safeguarded, as the company is regarded as an entirely separate legal body, distinct from its directors.
As with most other types of corporate entity, the directors of a company limited by guarantee have to fulfil some important annual duties. Firstly, you have to provide a full record of the company’s finances to Companies House. This should include a profit and loss sheet, a report from a director of the company limited by guarantee and a full balance sheet. This record of finances has to be filed within nine months of the end of the financial year, and there are penalties for late filing, which can escalate quite dramatically.
The second responsibility is to provide a confirmation statement. This document replaced the annual return from June 30th 2016, and is intended to provide information about the structure of the guaranteed company. It has to be filed within four weeks of the anniversary of the guarantee company's incorporation, and failure to comply with this requirement can lead to hefty fines.