Why is the limited by guarantee structure suitable for non-profits?


I am gearing up to form a new community football club near Edinburgh. I’ve been told by some of the parents involved that I should incorporate the club as a limited by guarantee company, as this is the go-to structure choice for non-profits. No one has actually explained why, though. What is it about limited by guarantee companies that suits non-profit ventures?



Limited by guarantee companies are ideal for non-profit ventures because they don’t have any shares or shareholders. This means that the ‘profits’ do not have to be issued to shareholders. Instead, surplus income can be used to help the company achieve its nonprofit mission.

2 years ago

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