A company Limited by Guarantee is an alternative type of limited company used mainly for non-profit organisations. It can also be referred to as a Limited by Guarantee Company (this is the name Companies House use), a Private Company Limited by Guarantee or simply an LBG. We can assist you in forming a Limited by Guarantee company from our package page.
Here are some quick facts about this type of company structure:
- A Limited by Guarantee company have "members" instead of shareholders as owners, they are otherwise known as "Guarantors" and they must agree to pay a nominal amount in the event of the company dissolving (closing down) or if something goes wrong within the company.
- They are generally non-profit companies (although in some circumstances profits can be made and "distributed" but you will not be able to have "charitable status" if that is the case).
- All limited companies must be registered at Companies House. All limited companies should submit a 'Confirmation Statement' (previously known as an Annual Return) to Companies House each year as well as their Annual Accounts.
What are the most common uses of Limited by Guarantee companies?
- Membership organisations, including students' unions
- Sports associations
- Workers' co-operatives
- Other social enterprises
- Non-governmental organizations (NGOs)
When registering a Limited by Guarantee company, you'll need:
- A company name
- At least one director - must be 16 years or older and, can be of any nationality and live anywhere in the world. You can appoint a company as a director but you must have at least one "person" also.
- At least one member/ guarantor
- Details of people with significant control (PSC)
- A UK registered office
- Your Standard Industrial Classification (SIC code)
- To check whether you need to register for VAT
- A business bank account - to keep your personal and business finances separate (this is optional)
- A licence for some business activities - not all companies need a licence but use the licence finder to find out