Please see the following list of facts about forming a Limited by Guarantee company.
- It does not usually have a share capital or shareholders but instead has members who act as guarantors.
- The guarantors give an undertaking to contribute a nominal amount (typically very small) in the event of the winding up of the company.
- It is often believed that it cannot distribute its profits to its members but (depending on the provisions of the articles) this is not actually true.
- A company Limited by Guarantee that distributes its profits to members would not be eligible for charitable status.
- A Limited by Guarantee must include the suffix ""Limited"" in its name, except in circumstances specifically excluded by law. One condition of this exclusion is that the company does not distribute profits (Currently, we cannot offer this exclusion as part of our service).
As with a standard Limited (by Shares) company, a company Limited by Guarantee has its own legal identity and the personal finances of its guarantors (or members) are protected.
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