A private company Limited by Guarantee (LBG) is an alternative type of limited company which is used mainly for non-profit organisations. This means that all of the money that is generated by this type of company is kept within the business or used to promote its non-profit purpose and activities.
It usually has neither any share capital nor shareholders. Instead its members act as guarantors who undertake to contribute a nominal amount (typically very small) in the event of the company being wound up.
A company which is limited by guarantee can distribute its profits to its members, if this is allowed by its articles of association, but then it would not be eligible for charitable status. There is nothing to prevent someone setting up this type of company to run a profit-making business in which the guarantors will keep the profits, but a limited by shares structure would make more sense for that purpose.
Companies that are Limited by Guarantee are most commonly used for:
This allows you to manage your existing companies and incorporate new ones without needing to re-enter the information. Click here to learn more.
We have partnered with an accountancy firm that specialises in providing accounting services to new businesses. This accountancy firm will send you a welcome e-mail within 2 working days of your company being incorporated.
You may then arrange a consultation with the firm, via Skype or telephone, which is free for the first 30 minutes. Alternatively, you may put questions to them by e-mail. The purpose of this initial consultation is to introduce you to their accountancy services and to let you discuss your accounting and taxation concerns.
* Please note that you should negotiate your fees with the accountancy firm directly.
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* As soon as your company is registered, we will provide you with promotional links to access the offers.
We provide a choice of up to 8 business bank or payment institution accounts, including ANNA, Barclays, Cashplus, CountingUp, Mettle and Tide, each of which has an easy online application process.
Our system will show you the banking options available for your business when you complete your company formation order. Simply select your preferred choice, and we will pass your details to our banking partners to contact you.
Learn more about how to open a business bank account* This offer is available only for companies with directors and shareholders who are all residents within the UK. Non-residents of the UK should check the options available within our Packages for Non-Residents.
During the application process our system will let you choose one of the following options regarding your company’s Articles of Association:
In accordance with section 60 of the Companies Act 2006 there are certain circumstances in which limited companies may omit the word ‘Limited’ or ‘Ltd’ (or the Welsh equivalents). This applies only to a private company which is limited by guarantee.
A private company that is limited by guarantee can apply to be exempt from the requirement to include "limited", "ltd", or the Welsh equivalents "cyfyngedig" or "cyf", from its name provided that the articles of association:
You can apply for exemption from using the term 'limited' at the end of your company’s name while you are filling in your application to register it on this website. Either use your own Articles or edit our model Articles to include the objects of your company that meet the requirements, above, for such exemption.
To claim exemption after registration/incorporation, a company that is limited by guarantee must complete Companies House form NE01.
For a company to be allowed to use any of the words above its Articles should include objects that reflect the specific purpose of the company and a non-profit distribution clause, which provides that any profits should be used to further the objects of the company and not paid to the members as dividends. In most instances the Articles should also include a one member, one vote clause.
This package allows clients to upload their own Articles or download and edit our model Articles so that they comply with Companies House requirements in order to use the above “sensitive” words that are laid out above.
Should you wish to set up a charity then you must first decide what type of charity structure you require. There are 4 main charity structures:
A charity need not be registered as a company unless limited liability is sought in order to protect its members. If such protection for its members is desired, however, then the organisation should be registered at Companies House as a company which is limited by guarantee.
Once the charity is registered/incorporated at Companies House it may need to be registered also as a charity with the Charity Commission in England and Wales or else with the Office of the Scottish Charity Regulator (OSCR) in Scotland. In order to meet the requirements of the charity regulators it is commonplace for 3 members (known as trustees) to be appointed. Certain provisions must also be included in the articles of association that state the exclusively charitable aims of the company and the restriction of any profit distribution to its members.
We provide Model Charity Articles which you can edit and insert your company's objects. Alternatively, you can use your own Articles. We recommend that all clients who want charity status for their company follow the Charity Commission's or OSCR’s guidance on how to draft charitable objects: https://www.gov.uk/government/publications/example-charitable-objects .
The Companies Act considers “Charity” to be a sensitive word. Companies House will allow its use as part of the company’s name only if they are provided with a letter of no-objection from the Charity Commission in England & Wales, the OSCR in Scotland or the Charity Commission for Northern Ireland (within Northern Ireland). The company name should be clearly stated in full within the letter.
Alternatively, should you wish to change the name of your company then you will need to provide proof that your company is registered as a charity with the relevant organisation in the part of the United Kingdom in which your company is registered/ incorporated.
To set up a charity we recommend that you seek further advice from an accountant, lawyer or business advisor.
PurchaseEnter the proposed company name to see if it is available.
We offer various incorporation packages, beginning from £11.99. Compare them and choose the one that best suits your needs.
Compare PackagesAs a company formation agent we must follow “Know Your Customer” (KYC) requirements and obtain our customers’ proof of identity and address.
If you are a UK resident and open a limited company, we will use the information from your company order form to check your ID and address. In 90% of cases our customers successfully pass our digital ID checks.
If you are not eligible for our digital ID check, or for some reason you do not at first pass our digital ID check, then we will e-mail you a special request that you provide the necessary information and documents. For more information, see our ID requirements.
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