A company limited by guarantee is an incorporated organisation. This means that it has gone through the registration process that converts a new or existing business into a corporate body, making it a legal entity in its own right.
With a company that is limited by guarantee, the financial liability of members, including the Management Committee, is usually a nominal amount, should the company face financial difficulties (although it does not protect against fraud, negligence, etc).
A limited company may also be a charity, if its purposes and activities are approved by the Charity Commission for Northern Ireland. More on charitable status.
Type of organisation: Company limited by guarantee
Legal Status: Incorporated
Governing Document: Memorandum and articles of association
Common Examples: Large voluntary organisation; community group that owns premises; organisation that employs staff
As company limited by guarantee has:
* Limited liability does not protect the Management Committee or its members against: negligence; acting improperly or dishonestly; failing to comply with statutory requirements (such as employment law); failing to meet obligations under company law or trading without sufficient assets to cover debts, failing to meet terms of a contractual agreement (such as spending grant money on an activity outside that agreed with your funder); etc.
More on liability and legal structures.
A company limited by guarantee is usually appropriate when some or all apply:
For more information, please download the Company Law Help Sheet.