Can I draw a salary from limited by guarantee company?


Do you know whether it’s okay to draw a salary from a limited by guarantee company? I appreciate these companies are usually supposed to be non-profit, but does that mean you can’t give out salaries? I only ask because I’d like to incorporate a limited by guarantee company, as this will best suit the structure of a new business idea. But even though the business isn’t going to be run for a profit, I’ve still got little ones to feed.



Most nonprofits companies restrict the payment of surplus income to guarantors, but you can certainly take a salary as a director because you are employed by the company to run the business. Just make sure there are no restrictions included in your articles that prohibit payments to directors - section 19 of the Model articles for limited by guarantee companies allows for directors’ remuneration.

The rules are a lot stricter if your company is registered as a charity. Most trustees, including directors, do not get paid for their role. You can apply to the Charity Commission to state your case for receiving a salary, but there is no guarantee of your request being approved. You can find out more here.

2 years ago

Your answer