Limited by Guarantee

More information about Limited by Guarantee Companies & our Limited by Guarantee packages

What is a Company Limited by Guarantee?

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.

What are the features of a Company Limited by Guarantee?

• It does not usually have a share capital or shareholders but instead has members who act as guarantors.
• The guarantors give an undertaking to contribute a nominal amount (typically very small) in the event of the winding up of the company.
• It is often believed that it cannot distribute its profits to its members but (depending on the provisions of the articles) this is not actually true.
• A company Limited by Guarantee that distributes its profits to members would not be eligible for charitable status.
• A Limited by Guarantee must include the suffix "Limited" in its name, except in circumstances specifically excluded by law. One condition of this exclusion is that the company does not distribute profits.

What are the most common uses of Limited by Guarantee companies?

• Clubs
• Membership organisations, including students' unions
• Sports associations
• Workers' co-operatives
• Other social enterprises
• Non-governmental organizations (NGOs)
• Charities

How does the Limited by Guarantee with Privacy package work?

We give you permission to use 20 Wenlock Road, London, N1 7GU as your company’s registered office (the official address for the company) and your company officers’ service address (the official address for company officers) for one year. After this period the package automatically renews at £79.99.

This service provides the scanning and emailing of all official government mail addressed to the company and officers. This includes mail from governing bodies such as Companies House, HM Revenue and Custom and Government Gateway. If you wish to receive standard business mail, our company Virtual Office MadeSimple can provide this service from as little as £29.99 a month.

Who needs to provide Proof of ID and Proof of Address documentation when forming a Private Company Limited by Guarantee?

The account holder and all company officers must provide Proof of ID and Address documentation. This is to ensure that we comply with Anti-Money Laundering (AML) regulations and ‘Know Your Customer’ requirements. We are unable to offer our company registered office and/or service address service until this information is provided. Here’s how to quickly, simply and securely provide the necessary Proof of ID and Proof of Address documentation.

Are companies limited by guarantee suitable for commercial enterprises?

No. Under section 5 of the Companies Act 2006, new companies cannot be formed as a company limited by guarantee with a share capital.

Can you form Section 60 companies?

Section 60 companies are companies without the word 'Limited' at the end of the company name. We cannot currently form these companies.