Limited by Guarantee Companies
Limited by guarantee companies are designed for organisations that prioritise purpose over profit.
Why it’s commonly used:
It does not have shareholders or share capital. Instead, it has members known as guarantors who agree to contribute a small, fixed amount if the company is wound up.
It supports organisations that aim to reinvest any surplus income back into their mission, rather than distributing profits.
It provides a formal legal structure, giving credibility and protection while allowing the organisation to operate independently.
Key Features:
- No shareholders, only guarantors with limited liability
- Profits are reinvested to support the company’s objectives rather than distributed
- Legally separate from its members
- Commonly used for charities, clubs, and community organisations
💡 Best suited for: Non-profit organisations, charities, social enterprises, and community groups that want a structured, legally recognised entity while ensuring all income is used to further their mission.