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In British, Irish and Australian
company law Corporate law (also known as business law or enterprise law or sometimes company law) is the body of law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules t ...
, a company limited by guarantee (CLG) is a type of
corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), 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 ...

corporation
used primarily (but not exclusively) for
non-profit organisation A nonprofit organization (NPO), 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 contrast with an entity that o ...
s that require
legal personality In law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by its environment, is described by its b ...
. A company limited by guarantee does not usually have a share
capital Capital most commonly refers to: * Capital letter Letter case (or just case) is the distinction between the letters that are in larger uppercase or capitals (or more formally ''majuscule'') and smaller lowercase (or more formally ''minusc ...
or
shareholder 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 law, trust or partnership) that is registered by the corporation as the ...
s, but instead has members who act as
guarantors In finance Finance is the study of financial institutions, financial markets and how they operate within the financial system. It is concerned with the creation and management of money and investments. Savers and investors have money availabl ...
of the company's
liabilities Liability may refer to: Law * Legal liability, in both civil and criminal law ** Public liability, part of the law of tort which focuses on civil wrongs ** Product liability, the area of law in which manufacturers, distributors, suppliers, re ...
: each member undertakes to contribute an amount specified in the articles (typically very small) in the event of
insolvency In accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic entities such as businesses and corporations. Accounting, which has been call ...
or of the
winding up Liquidation is the process in accounting by which a company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal personality, legal or a mixture o ...
of the company. A company limited by guarantee can distribute its
profit Profit may refer to: Business and law * Profit (accounting) Profit, in accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic en ...
s to its members, if allowed to by its
articles of association In corporate governance Corporate governance is the collection of mechanisms, processes and relations used by various parties to control and to operate a corporation. Governance structures and principles identify the distribution of rights an ...
, but then it would not be eligible for
charitable status A charitable organization or charity is an organization whose primary objectives are philanthropy Philanthropy consists of "private initiatives, for the Public good (economics), public good, focusing on quality of life". Philanthropy contrasts ...
. Like a
private company limited by shares A private company limited by shares is a class of private limited company A private limited company is any type of business entity in Privately held company, "private" ownership used in many jurisdictions, in contrast to a Public company, ...
, 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 The Companies Act 2006 (c 46) is an Act of the Parliament of the United Kingdom The Parliament of the United Kingdom is the of the , the and the . It alone possesses and thereby ultimate power over all other political bodies in the ...
, new companies cannot be formed as a company limited by guarantee with a share capital.


Uses

Some uses of companies limited by guarantee include
club Club may refer to: Arts, entertainment, and media * Club (magazine), ''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 an ...
s, membership organisations, including
students' unions A students' union, also known by many other names, is a student A student is primarily a person enrolled in a school A school is an educational institution designed to provide learning spaces and learning environments for the teaching ...
, residential property management companies, sports associations (such as the
PGA European Tour The PGA European Tour is an organisation which operates the three leading men's professional golf Golf is a club-and-ball sport in which players use various Golf club, clubs to hit Golf ball, balls into a series of holes on a golf course, cou ...
), workers'
co-operatives A cooperative (also known as co-operative, co-op, or coop) is "an autonomous The federal subject The federal subjects of Russia, also referred to as the subjects of the Russian Federation (russian: субъекты Российск ...
, other
social enterprise 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 c ...
s,
non-governmental organization A non-governmental organization, or simply an NGO, is an organization An organization, or organisation (Commonwealth English The use of the English language English is a of the , originally spoken by the inhabitants of ...
s (NGOs) and charities (such as
Oxfam Oxfam is a British founded confederation of 21 independent charitable organization A charitable organization or charity is an organization whose primary objectives are philanthropy Philanthropy consists of "private initiatives, for the ...
), and at least one
political party 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 political ideology ...
(the
UK Independence Party The UK Independence Party (UKIP ) is a Eurosceptic Euroscepticism, also known as EU-scepticism, means criticism of the European Union The European Union (EU) is a political and economic union of Member state of the European Unio ...
). The railway infrastructure provider
Network Rail Network Rail Limited is the owner (via its subsidiary Network Rail Infrastructure Limited, which was known as Railtrack plc before 2002) and Railway infrastructure manager, infrastructure manager of most of the railway network in Great Britain. ...

Network Rail
, domain name registry
Nominet UK Nominet UK is currently delegated by IANA The Internet Assigned Numbers Authority (IANA) is a standards organization that oversees global IP address allocation, Autonomous system (Internet), autonomous system number allocation, DNS root zone, ...
,
England and Wales Cricket Board The England and Wales Cricket Board (ECB) is the national governing body of cricket Cricket is a Bat-and-ball games, bat-and-ball game played between two teams of eleven players each on a cricket field, field at the centre of which is ...
and
IXP 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 ...

IXP
s LINX (
London Internet Exchange Image:TelehouseDocklands.jpg, 300px, Telehouse Docklands, home of the London Internet Exchange since 1994. The London Internet Exchange ("LINX") is a Mutual organization, mutually governed Internet exchange point (IXP) that provides peering ser ...
), and
LONAP London Network Access Point (LONAP) is a London-based Internet exchange point (IXP) founded in 1997 as a membership organisation and currently has around 200+ members, making it the second largest IXP in the UK and around the 15th largest IXP in t ...
(London Access Point) are also companies limited by guarantee.
Australia Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...

Australia
also has companies limited by guarantee,
Cricket Australia 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 ...
being one example.


Commercial enterprises

One of the largest companies limited by guarantee is
Bupa Bupa is an international health insurance Health insurance or medical insurance (also known as medical aid in South Africa) is a type of insurance Insurance is a means of protection from financial loss. It is a form of risk managemen ...
, 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 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 moves rank ...
, 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 A limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore can exhibit elements of partnerships and corporations. In an LLP, each partner is not ...
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 Swiss may refer to: * the adjectival form of Switzerland ,german: Schweizer(in),french: Suisse(sse), it, svizzero/svizzera or , rm, Svizzer/Svizra , government_type = Federalism, Federal semi-direct democracy under a multi-party assembly-indep ...
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 services.


References

{{Reflist


External links


UK Office of Public Sector Information: Companies Act 2006
01 Privately held companies Social economy Types of business entity Companies of Northern Ireland . 01 01 de:Aktiengesellschaft (Vereinigtes Königreich)#Private company limited by guarantee