Company Limited by Guarantee
A company limited by guarantee has no shares and no share capital. It has members, and each of them promises a fixed amount that only becomes payable if the company is wound up.
That single feature decides everything else about the form — and it decides whether it suits you.
It is the usual shape for clubs, associations, professional bodies, sports organisations and non-profit projects. It exists in both the United Kingdom and Ireland, where it is called a CLG.
- No share capital to raise or pay up
- Members instead of shareholders
- Formation with registered office from EUR 580 net
- Limited liability, as with any limited company
What it cannot do
This section comes before the advantages on purpose. The form is chosen wrongly more often than any other, and always for the same reason.
There are no shares to sell, transfer or inherit. Membership is personal. It ends when the member leaves and does not pass to anyone. If you expect to bring in an investor later, or to sell the business as a going concern, this is the wrong form.
There is no dividend. Surpluses stay in the company or go to its stated purpose. A guarantee company can pay salaries for work done, but it cannot distribute profit to its members the way a company with shares can.
Converting to a company with shares later is possible in principle but is a separate procedure with its own cost. Choosing correctly at the start is cheaper than correcting.
What the guarantee actually is
The name misleads people, so it is worth one paragraph.
Each member undertakes to contribute a fixed sum towards the company's debts — but only if the company is wound up, and only up to that sum. The amount is set in the constitution. A nominal figure is common, and it is not a payment made at formation.
Until winding up, nobody pays anything. The guarantee is a promise, not a deposit, and it is the reason the form needs no capital.
Non-profit is not the same as this form
The two are often used as if they meant one thing. They do not.
A company limited by guarantee is a company form. Charitable or non-profit status is a recognition by the tax authorities, granted on what the organisation does and how its constitution is drafted. The one does not follow from the other.
Many charities use this form, and many guarantee companies are not charities. If tax-privileged status is the point, settle that with an adviser and the revenue authority before the company is formed — the constitution has to fit the requirement from the start.
We form the company. We do not apply for charitable status and do not advise on it.
What it costs
The same packages as for a private Limited. There is no capital to arrange, so nothing else comes on top.
| Package | England and Wales | Ireland |
|---|---|---|
| S — formation only | 180.00 | 260.00 |
| M — with registered office | 580.00 | 690.00 |
| L — with compliance | 1,250.00 | 1,340.00 |
From the second financial year the running service costs 385.00 in England and 470.00 in Ireland. Package S has nothing to renew.
Net prices in euro. Register fees are passed on at cost and shown separately in the order form.
Britain or Ireland
The same question as for every other form on this site, and the same answer: it depends where the organisation actually operates.
An Irish CLG keeps EU freedom of establishment; a British one does not. If your members and your activity are in the European Union, Ireland is the safer choice. The reasoning is set out on the Irish Limited and applies here in the same way.
One Irish rule is worth repeating: a company cannot be a director there, however the appointment is worded.
How to start
Check the name first. For associations and clubs it is often taken, and finding that out early saves a round.
The other forms side by side are on company types.
Not certain this is the right form? Ask first — by e-mail or through the contact form. A form chosen wrongly is the most expensive mistake on this page.