Northern Ireland Company Limited By Guarantee

Northern Ireland Company Limited By Guarantee

As the limited by guarantee company operates without the aim of making a profit, there are no shares issued. This type of guarantee limited company has members instead of shareholders. Instead of buying shares, anyone who wants to be a member signs a form agreeing to pay a sum of money (for example £1). The members will have limited liability - the member’s liability is limited to the amount each member agrees to contribute to the assets of the company in the event of its being wound up, normally £1. This form is called the ‘guarantee’ and is legally binding.

The members agree to contribute a membership fee or subscription, normally have equal voting rights and elect a board of directors. Any profits are not distributed as dividends, but are put towards the company activities. To form a limited by guarantee company we require one object clause outlining the broad aim of the company, we then incorporate this statement into your Memorandum and Articles.

Unlike unincorporated associations and trusts, the guarantee company has a separate legal existence from its members. This means that, in its own right, it can employ people, own property, enter into contracts and sue or be sued in the courts.

The directors, who are also defined in law as charity trustees if it is a charitable company, conduct the daily running of the business.

The directors may call themselves a management committee, an executive committee, board of trustees or board of directors.

As with all Northern Ireland companies a Limited by Guarantee company needs to have a registered office address in Northern Ireland and must file annual returns and accounts with the Registrar of Companies in Belfast.