Does a company limited by guarantee have shareholders?

What is the difference between companies limited by guarantee and shares?

Limited by guarantee companies are set up without share capital. So instead of shares and shareholders, they are owned by one or multiple guarantors who each agree to pay a fixed sum of money (a ‘guarantee’) toward debts if the business becomes insolvent.

Do you have to have shareholders in a limited company?

Work out your shares

A company limited by shares must have at least one shareholder, who can be a director. If you’re the only shareholder, you’ll own 100% of the company. There’s no maximum number of shareholders. The price of an individual share can be any value.

Who are members of company limited by guarantee?

As members of a company limited by guarantee, the members collectively control the company, but they do not own it. A member does not own any shares in the company, so cannot buy or sell shares for profit.

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Can a company limited by guarantee have no members?

A company limited by guarantee does not – except in very few legacy companies formed in 1981 or before – have shareholders or share capital. … The company must have at least one member and, unless the company’s articles of association state otherwise, there’s no maximum limit.

What are the advantages of a company limited by guarantee?


  • It’s a private limited company that has guarantors rather than shareholders, so it’s suitable for voluntary organisations. …
  • The company is a clear legal entity, separate from the persons involved in it – and can hold property, enter into leases and other contracts, employ people, etc, in its own name.

What are the disadvantages of a company limited by guarantee?


  • There will be costs and expenses to set the company up and administer it.
  • There are ongoing filing requirements at Companies House, and someone will need to take responsibility for this.
  • It can be difficult to keep track of members who may move to a new house or otherwise can’t be contacted.

What does it mean if a company is limited by guarantee?

A company limited by guarantee does not have any shares or shareholders (like the more common limited by shares structure) but is owned by guarantors who agree to pay a set amount of money towards company debts.

Does a director have to be a shareholder?

Shareholders and directors have two completely different roles in a company. The shareholders (also called members) own the company by owning its shares and the directors manage it. Unless the articles say so (and most do not) a director does not need to be a shareholder and a shareholder has no right to be a director.

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What rights do shareholders have in a limited company?

Majority shareholding

Generally, all shareholders of a private limited company are entitled to inspect records of minutes of board meetings and copies of all shareholders’ written resolutions. They are also entitled to receive notice of general meetings and copies of the company’s report and accounts.

Can a company limited by guarantee make a profit?

How does a company limited by guarantee distribute profits? Guarantee companies are not for profit-making purposes, but they act like non-profit organizations, and all the profits made in the company are reinvested to promote all its activities.

Can a company limited by guarantee pay its directors?

Company limited by guarantee that prohibits the payment of profits to members, requires any surplus assets on winding up to be given to charity and prohibits the payment of salaries or fees to its directors. …

How many directors does a company limited by guarantee have?

at least 3 directors; at least one secretary; at least one member. There is no upper limit on the number of directors, secretaries or members.