Are all limited by guarantee companies charities?

1

Hello

I was wondering about limited by guarantee companies. Based upon the nature of my business, I was told by my business mentor that a limited by guarantee company structure would be most appropriate for my new venture. What worries me is that this appears to be the way to incorporate a charity, which my business definitely is not. Do all limited by guarantee companies need to be charities?

Thanks

Toby Ryan

Answers

0

No, not all limited by guarantee companies are charities. Charity registration is something that is carried out separately with the Charity Commission once a company has been incorporated at Companies House.

Many people use limited by guarantee companies to set up other types of non-profit ventures that focus on social or community-based objectives, including:

  • Membership organisations
  • Co-operatives
  • Sports clubs
  • Societies
  • Community projects
  • Voluntary groups or agencies
  • Workers’ or students’ unions

It is also possible to set up a limited by guarantee company for any kind of commercial profit-making business venture. However, most people prefer the limited by shares structure for this type of business because the company owners (shareholders) - each of whom owns a certain percentage of the company as shares - can more easily work out and distribute their profit entitlement according to the shareholdings.

a year ago
 

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