Why do limited by guarantee companies not have shareholders?


A friend is registering a new venture we’ve got in the works as a limited by guarantee company, and I told him to register me as a shareholder. But he’s just told me that he couldn’t do that because limited by guarantee companies don’t actually have shareholders. Why is that? Just out of curiosity...



Limited by guarantee companies do not have shareholders because there are no shares (‘share capital’) in this type of company. Instead of shareholders and shares, companies limited by guarantee have guarantors and guarantees.

The share capital in a limited by shares company sets the limit of the shareholders’ financial liability for company debts. The guarantee promised by each guarantor in a limited by guarantee company sets the limit of their financial liability for company debts.

2 years ago

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