What is a Guarantee Company?

A company limited by guarantee is an alternative type of incorporation used primarily for non-profit organisations that require corporate status. A guarantee company does not have a share capital, but has members who become guarantors instead of shareholders. The guarantors give an undertaking defined in the Articles to contribute a nominal amount towards the winding up of the company in the event of a shortfall upon cessation of business.

A guarantee company cannot distribute its profits to its members, and is therefore eligible to apply for charitable status if necessary.

Common uses of guarantee companies include clubs, membership organisations, sports associations and charities.

Key Points

  • Non-profit corporate entity – assets or financial surplus cannot be distributed to members
  • A Guarantee Company is not owned by its members and cannot be transferred by its members for value – it has no share capital
  • Suitable for clubs, membership organisations, sports associations etc
  • Can apply for charitable status
  • Members have limited liability
  • Can be incorporated in most circumstances within hours
  • Some input required from client to establish main objects if required or objects can be unrestricted

Ordering a Guarantee Company

Our charge for incorporating a company limited by guarantee is slightly higher than that for a standard company limited by shares due to the additional work required in ensuring the company’s articles are correctly drafted. Orders can be placed online on our usual order pages as with any other company. As with all our incorporations, our Articles of Association for Companies Limited by Guarantee have been fully updated to comply with the Companies Act 2006.


Company Registrations Online Limited is a company registered in England and Wales with company number 3838753, VAT registration number 732 4047 59

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