Limited by guarantee company with charity articles

This company type is suitable for charitable organisations and not-for-profit companies such as clubs, associations, sports clubs, membership clubs, educational bodies and voluntary organisation. It’s perfect for organisations that can’t set up a traditional limited by guarantee company .

What’s included in this package?

• Formation of your new UK limited by guarantee company
• Charity articles of association
• Super-fast online service (no signatures or paperwork required)
• Digital copies of all company documents (certificate of incorporation, memorandum and articles of association, and company register with first entries)
• Web authentication code
• Printed copies of official documents
• Free .co.uk domain name
• Pre-submission review

Optional free extras

• Free business startup and marketing guides
• Free consultation with an accountant
• Free digital marketing consultation
• Free online company manager account (web portal)
• Free customer support for the life of your company

Exemption from having 'limited' or ‘Ltd’ at the end of your company’s name

If the objects of your limited by guarantee company are charitable, you can be exempt from having the word “Limited” or “Ltd' at the end of your company’s name. During the application process, you will be asked to tick a box requesting the name exemption. At the of the application process, you will be asked to download our limited by guarantee company articles of association. You can then insert the objects of your organisation and upload the edited document. The amended articles will be submitted electronically with your application.

Can I use the word ‘charity’ in the company name?

The word “charity” is considered a sensitive word by Companies House, and it cannot be included in your company name until you are registered with the Charity Commission . The easier option for you is to register your company under another name, which will give you a company number. After that, you can apply to the Charity Commission to have your company added as a “registered charity”. This will then give you a separate charity number. At this point, you will be recognised as a charity and can simply change your company name to include the word “charity”. We can help you inform Companies House of your name change and handle all the paperwork for you.

Why use a limited by guarantee company for a charity?

When you register a company, you have multiple options. Registering as a limited by guarantee company will protect the people running the organisation from personal liability for the company's debts. In a charitable company’s limited by guarantee model articles, the liability is limited to the amount of the guarantee set out in the model articles, which is normally just £1. Funding bodies, such as local authorities, may also insist that the charitable organisation be registered as limited by guarantee.

How is a charitable organisation limited by guarantee different from a limited by shares company?

A limited by guarantee company is similar to a company limited by shares in that it is registered at Companies House, ran by directors and must file accounts and a confirmation statement every year. The fundamental difference is that a limited by guarantee company will not have any shareholders but members who control it.

What are the pros and cons of setting up a charitable organisation limited by guarantee?

There are various pros and cons of setting up a charitable organisation as a limited by guarantee company. Whether you decide to opt for this option will depend on your needs and activities.

Pros

• Pay reduced business rates
• Reduced personal liability
• Receive tax relief
• Ability to receive certain types of grants and funding

Cons

• You must follow charity law, which includes informing the Charity Commission (and the public) about your work
• You can only do activities that are charitable in law
• A limited by guarantee charity is run by trustees who do not usually personally benefit from the organisation
• You must be independent — a charity can work with other organisations but must make independent decisions about how it carries out its charitable purposes. For members not comfortable with this, this can prove a disadvantage.