In British, Australian, Bermudian, Hong Kong and Irish company law
(and previously New Zealand), a company limited by guarantee (CLG) is a type of
A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and re ...
used primarily (but not exclusively) for
A nonprofit organization (NPO) or non-profit organisation, also known as a non-business entity, not-for-profit organization, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in co ...
s that require
Legal capacity is a quality denoting either the legal aptitude of a person to have rights and liabilities (in this sense also called transaction capacity), or altogether the personhood itself in regard to an entity other than a natural perso ...
. A company limited by guarantee does not usually have a share
Capital may refer to:
* Capital city, a municipality of primary status
** List of national capital cities
* Capital letter, an upper-case letter Economics and social sciences
* Capital (economics), the durable produced goods used fo ...
A shareholder (in the United States often referred to as stockholder) of a corporation is an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the legal ow ...
s, but instead has members who act as guarantors
of the company's liabilities
: each member undertakes to contribute an amount specified in the articles (typically very small) in the event of
In accounting, insolvency is the state of being unable to pay the debts, by a person or company (debtor), at maturity; those in a state of insolvency are said to be ''insolvent''. There are two forms: cash-flow insolvency and balance-sheet i ...
or of the winding up
of the company.
A company limited by guarantee can distribute its
Profit may refer to:
Business and law
* Profit (accounting), the difference between the purchase price and the costs of bringing to market
* Profit (economics)
In economics, profit is the difference between the revenue that an economic e ...
s to its members, if allowed to by its
articles of association
In corporate governance, a company's articles of association (AoA, called articles of incorporation in some jurisdictions) is a document which, along with the memorandum of association (in cases where it exists) form the company's constituti ...
, but then it would not be eligible for charitable status
private company limited by shares
A private company limited by shares is a class of private limited company incorporated under the laws of England and Wales, Northern Ireland, Scotland, certain Commonwealth countries, and the Republic of Ireland. It has shareholders with limi ...
, a company 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.
Until 1981, it was possible in the United Kingdom to form a company limited by guarantee with share capital. Under section 5 of the Companies Act 2006
, new companies cannot be formed as a company limited by guarantee with a share capital.
Some uses of companies limited by guarantee include
Club may refer to:
Arts, entertainment, and media
* ''Club'' (magazine)
* Club, a '' Yie Ar Kung-Fu'' character
* Clubs (suit), a suit of playing cards
* Club music
* "Club", by Kelsea Ballerini from the album '' kelsea''
Brands and enterpris ...
s, membership organisations, including students' unions
, residential property management companies, sports associations (such as the PGA European Tour
A cooperative (also known as co-operative, co-op, or coop) is "an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically-control ...
A social enterprise is an organization that applies commercial strategies to maximize improvements in financial, social and environmental well-being. This may include maximizing social impact alongside profits for co-owners.
Social enterprises ca ...
A non-governmental organization (NGO) or non-governmental organisation (see spelling differences) is an organization that generally is formed independent from government. They are typically nonprofit entities, and many of them are active in ...
s (NGOs) and charities (such as
Oxfam is a British-founded confederation of 21 independent charitable organizations focusing on the alleviation of global poverty, founded in 1942 and led by Oxfam International.
Founded at 17 Broad Street, Oxford, as the Oxford Co ...
), and at least one
A political party is an organization that coordinates candidates to compete in a particular country's elections. It is common for the members of a party to hold similar ideas about politics, and parties may promote specific ideological or ...
UK Independence Party
The UK Independence Party (UKIP; ) is a Eurosceptic, right-wing populist political party in the United Kingdom. The party reached its greatest level of success in the mid-2010s, when it gained two members of Parliament and was the largest ...
). The railway infrastructure provider
Network Rail Limited is the owner (via its subsidiary Network Rail Infrastructure Limited, which was known as Railtrack plc before 2002) and infrastructure manager of most of the railway network in Great Britain. Network Rail is an "arm's leng ...
, domain name registry
Nominet UK is currently delegated by IANA to be the manager of the .uk domain name. Nominet directly manages registrations directly under .uk, and some of the second level domains .co.uk, .org.uk, .sch.uk, .me.uk, .net.uk, .ltd.uk and .plc.uk. ...
England and Wales Cricket Board
The England and Wales Cricket Board (ECB) is the national governing body of cricket in England and Wales. It was formed on 1 January 1997 as a single governing body to combine the roles formerly fulfilled by the Test and County Cricket Board, ...
Internet exchange points (IXes or IXPs) are common grounds of IP networking, allowing participant Internet service providers (ISPs) to exchange data destined for their respective networks. IXPs are generally located at places with preexisting ...
s LINX (
London Internet Exchange
The London Internet Exchange ("LINX") is a mutually governed Internet exchange point (IXP) that provides peering services and public policy representation to network operators (over 950 different ASNs). It was founded in 1994 in London. LI ...
), and LONAP
(London Access Point) are also companies limited by guarantee. Australia and Hong Kong also have companies limited by guarantee,
Cricket Australia (CA), formerly known as the Australian Cricket Board (ACB), is the governing body for professional and amateur cricket in Australia. It was originally formed in 1905 as the 'Australian Board of Control for International Crick ...
and the World Wide Fund for Nature Hong Kong
One of the largest companies limited by guarantee is
Bupa , legally British United Provident Association Limited, is an international health insurance and healthcare group with over 38 million customers worldwide.
Bupa's origins and global headquarters are in the United Kingdom. Its main countrie ...
, the healthcare company, which has 32 million customers in more than 190 countries and which employs more than 84,000 people around the world.
A number of professional services providers are structured as private companies limited by guarantee in which the members that provide client-facing
services are the individual constituent firms using a common brand. The company limited by guarantee typically does not itself provide client-facing
services. The Big Four accountancy firms (Deloitte, Ernst & Young, KPMG, and PriceWaterhouseCoopers) are each organized using this structure.
Some law firms also use this structure to establish an internationally branded presence. For example, the Anglo-Canadian law firm of
Gowling WLG is a multinational law firm formed by the combination of Canada-based Gowlings and UK-based Wragge Lawrence Graham & Co in February 2016, in the first multinational law firm combination co-led by a Canadian firm. Gowling WLG ranks at ...
, formed in 2016, is structured as an English private company limited by guarantee (named Gowling WLG International Limited), in which the two limited liability partnership
s of Gowling WLG (Canada) LLP and Gowling WLG (UK) LLP are members and provide legal services; the structure is similar to the Swiss Verein
structure used by several other major international law firms. In another example, the Anglo-American law firm of Womble Bond Dickinson
is similarly structured, with two limited liability partnerships of Womble Bond Dickinson (UK) LLP and Womble Bond Dickinson (US) LLP being the members and providing client-facing
External linksUK Office of Public Sector Information: Companies Act 2006
Privately held companies
Social economy in the United Kingdom
Types of business entity
Companies of Northern Ireland
de:Aktiengesellschaft (Vereinigtes Königreich)#Private company limited by guarantee