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Companies Limited by Guarantee
Not-for-profit organisations can see significant benefits from structuring themselves as companies limited by guarantee, and JMW Solicitors is ideally placed to help these businesses to handle all of the legal requirements involved.
Becoming a company limited by guarantee provides organisations with legal clarity, credibility and protection. For organisations looking to adopt this model, JMW can offer expert legal advice on the entire process, ensuring that members can unlock all of the benefits they are seeking as efficiently as possible.
How JMW Can Help
Our team of wills, trust and estate planning solicitors at JMW have considerable expertise on the legal side of setting up a private company limited by guarantee, and work with a broad range of clients in this area.
Whether you are running a charity, community group, sports club or social enterprise, we will guide you through the steps required to form a company limited by guarantee. We will also ensure you are made aware of all the relevant regulations, and the benefits and risks associated with this type of operating model.
JMW Solicitors has years of experience in this field, with our highly respected team often asked to give seminars on legal matters pertaining to wills, trusts and estate planning. We also regularly rank in the prestigious Chambers and Legal 500 guides as an industry leader.
Chambers 2019 noted that we are equally adept in dealing with “both small everyday matters or complex transactions involving many legal areas”, and that “there is always an expert on hand to guide clients, whatever the issue”.
What are the benefits of companies being limited by guarantee?
When a company is limited by guarantee, its members agree to act as guarantors who will pay a certain amount of money towards company debts. This is a form of limited liability, meaning the company will be recognised as a distinct legal entity, and the people running the business cannot be held personally responsible for its debts.
This ensures the personal finances of the company’s guarantors are protected beyond the amount set out in their guarantees. Additionally, obtaining limited status for the organisation can help to build trust and credibility for potential clients and investors.
What is the difference between being limited by shares or by guarantee?
Companies limited by guarantee do not issue shares, have no shareholders and do not raise any share capital.
In a company limited by shares, liability is limited to the amount the shareholder agreed to pay for their shares; for companies limited by guarantee, this value of the guarantee is set out in the company's articles, and is usually a nominal fee.
As such, organisations limited by guarantee are not usually operated on a principle of generating profit for stakeholders. They are not designed to allow stakeholders to take profit out of the company, and cannot be owned by their members in the same way that companies with share capital are owned by shareholders - this is why this model is usually preferred by charities and other not-for-profit ventures.
Talk to Us
To learn more about how we can help companies limited by guarantee, call JMW Solicitors on 0345 872 6666, or complete our online enquiry form to request a call back at a time that is convenient for you.