What is a company limited by a guarantee
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8 July 2012
A company limited by guarantee.
What is it?
A company limited by guarantee (CLG) applies where the liability of the
members is limited to the amount that the members promise to contribute
to the assets of the company in the event of its being wound up. A CLG
cannot be formed with share capital and if the constitution of the
company seeks to increase its shares then it will be a company limited
Can a public company be a CLG?
It follows from the above that as a public company must have a share
capital, it cannot be limited by guarantee.
Can you give me some examples of CLG?
For example a social or working member club, a trade association, a
management company where all the tenants are members. Its important
that these associations are incorporated because you dont have to
transfer the share every time someone leaves, while at the same time it
provides the benefit of limited liability.
Michael Coyle is a Solicitor Advocate and can be contacted at
Lawdit Solicitors is a commercial law firm based in Southampton
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Solicitors offer services and advice for litigation,
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are experts in commercial law with a heavy emphasis on Intellectual
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Article Published/Sorted/Amended on Scopulus 2012-08-17 08:50:33 in Legal Articles