View source for Company limited by guarantee

{{short description|Type of corporation}}
{{Corporate law|UK/Ire/Com}}
A '''company limited by guarantee''' ('''CLG''') is a type of [[company]] where the liability of members in the event the company is [[Liquidation|wound up]] is limited to a (typically very small) amount listed in the [[Corporate constitution|company's articles or constitution]].<ref>[http://www.companylawclub.co.uk/topics/companies_limited_by_guarantee.shtml companylawclub.co.uk], Retrieved 23 March 2014</ref> Most have no [[share capital]], although rare exceptions exist.
The form originated in the United Kingdom, and now exists under the [[company law]] of the Australia, Bermuda, Gibraltar, Hong Kong, Gambia, and Ireland, and in the Canadian provinces of [[Alberta]] and [[Nova Scotia]]. It  previously existed in New Zealand.
It is used primarily but not exclusively by [[non-profit organisation]]s (including charities) that require [[juristic person|legal personality]]. Other uses include [[mutual insurance]] companies and quasi-governmental bodies.
== Characteristics ==
In the UK, a company limited by guarantee can distribute its [[profit (accounting)|profit]]s to its members, if allowed by its [[articles of association]].<ref>{{cite book|author=Hannigan, B.|title=Company Law|publisher=Oxford University Press|year=2003|isbn=978-0-406-91356-2}}</ref> However, in Australia this is not allowed.<ref>{{Cite web |last=Omari |first=Ilyas |date=2024-05-23 |title=What Is a Company Limited by Guarantee? |url=https://lawpath.com.au/blog/company-limited-guarantee |access-date= |website=Lawpath |language=en-AU}}</ref>
In many countries, a company limited by guarantee must include the suffix ''Limited'' in its name; alongside [[private company limited by shares|private companies limited by shares]].
Until 1981, it was possible in the United Kingdom to form a company limited by guarantee with a share capital, although the number of these companies remaining is very small.,<ref>{{cite web |title=Companies House, England and Wales, guidance notes |url=http://www.companieshouse.gov.uk/about/gbhtml/gbf1.shtml |url-status=dead |archive-url=https://web.archive.org/web/20081012111500/http://www.companieshouse.gov.uk/about/gbhtml/gbf1.shtml |archive-date=12 October 2008 |access-date=23 March 2018 |website=companieshouse.gov.uk}}</ref>
== Not-for-profit uses ==
Some uses of companies limited by guarantee include [[club (organization)|club]]s and membership organisations, including [[students' unions]], residential property management companies, sports associations, such as the [[PGA European Tour]], [[co-operatives]], other [[social enterprise]], [[non-governmental organization]]s  and charities (especially larger charities, such as [[Oxfam]]), and at least one [[political party]] (the [[UK Independence Party]]<ref>UK Independence Party: [http://www.ukip.org/the_constitution constitution] {{Webarchive|url=https://web.archive.org/web/20140524022754/http://www.ukip.org/the_constitution |date=2014-05-24 }} and [http://wck2.companieshouse.gov.uk/companysearch?cnumb=05090691&cosearch=1 Companies House registry entry]</ref>).
The form is also often used by organisations with some kind of national coordinating function. Examples in the UK include the domain name registry [[Nominet UK]], [[England and Wales Cricket Board]] and [[IXP]]s LINX ([[London Internet Exchange]]) and [[LONAP]] (London Access Point). Examples elsewhere include [[Cricket Australia]] and the [[World Wide Fund for Nature|World Wide Fund for Nature Hong Kong]].<ref>{{cite web | url=https://webb-site.com/dbpub/orgdata.asp?p=259044 | title=World Wide Fund for Nature Hong Kong 世界自然(香港)基金會 }}</ref>
In the UK, some quasi-governmental organisations are incorporated as companies limited by guarantee, a government department or minister having ultimate control. The [[Financial Conduct Authority]] and [[Network Rail]] (the railway infrastructure provider) are examples.
== Commercial enterprises ==
One of the largest companies limited by guarantee is [[Bupa]], the healthcare company, which has 32 million customers in more than 190 countries and which employs more than 84,000 people around the world.<ref>{{Cite web|url=https://www.bupa.com/corporate/what-we-do/employee-wellbeing|title=Our employee wellbeing|website=Bupa - an international healthcare company}}</ref>
A number of professional services providers are structured as private companies limited by guarantee in which the members that provide [[client-facing]] services are the individual constituent firms using a common brand. The company limited by guarantee typically does not itself provide [[client-facing]] services. The Big Four accountancy firms (Deloitte,<ref>{{cite web|url=https://www2.deloitte.com/us/en/legal/terms-of-use.html|title=Terms of Use}}</ref> Ernst & Young,<ref>{{cite web|url=https://www.ey.com/en_us/legal-statement|title=Legal Statement}}</ref> KPMG,<ref>{{cite web|url=https://home.kpmg/xx/en/home/misc/governance.html|title=Governance|date=23 August 2022 }}</ref> and PriceWaterhouseCoopers<ref>{{cite web|url=https://www.pwc.com/gx/en/about/corporate-governance/network-structure.html|title=Network Structure}}</ref>) are each organized using this structure.
Some law firms also use this structure to establish an internationally branded presence. For example, the Anglo-Canadian law firm of [[Gowling WLG]], formed in 2016, is structured as an English private company limited by guarantee (named Gowling WLG International Limited), in which the two [[limited liability partnership]]s of Gowling WLG (Canada) LLP and Gowling WLG (UK) LLP are members and provide legal services;<ref>{{cite web|title=About the structure of Gowling WLG|url=https://www.gowlingwlg.com/en/global/resources/legal-information|access-date=24 February 2016}}</ref> the structure is similar to the [[Swiss Verein]] structure used by several other major international law firms.<ref>{{cite news|last1=Mackrael|first1=Kim|title=Gowlings Law Firm to Combine With U.K.'s Wragge Lawrence Graham|url=https://www.wsj.com/articles/gowlings-law-firm-to-combine-with-u-k-s-wragge-lawrence-graham-1436335201|access-date=24 February 2016|work=The Wall Street Journal|date=8 July 2015}}</ref> In another example, the Anglo-American law firm of [[Womble Bond Dickinson]] is similarly structured, with two limited liability partnerships of Womble Bond Dickinson (UK) LLP and Womble Bond Dickinson (US) LLP being the members and providing [[client-facing]] services.<ref>{{cite web|url=https://www.womblebonddickinson.com/us/legal-notices|title=Legal Notices}}</ref>
== References ==
{{refs}}
== External links ==
* [http://www.opsi.gov.uk/ACTS/acts2006/ukpga_20060046_en.pdf UK Office of Public Sector Information: Companies Act 2006].
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[[Category:Companies of Northern Ireland]]
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