Limited by guarantee is a type of company formation used mostly by non-profit or not-for-profit organisations such as a sports club or association, an organisation that entails membership or a workers’ co-operative, i.e. one that does not intend to make a profit.

This type of company has guarantees and guarantors instead of shares and shareholders. Unlike shareholders who often take a dividend out of a company, guarantors do not take any share of the profits of a limited by guarantee company allowing any such profits to remain in the company to further its objectives but they do guarantee to pay a certain amount of money towards the debts of the company.

The advantages of a limited by guarantee company is that, because it has members who act as guarantors rather than shareholders/owners, this means there is limited financial liability for the guarantors’ own personal finances which remain protected should the company face financial difficulties or any legal process.

A limited by guarantee company would normally be required to use ‘Limited’ (abbreviated to Ltd) in its name unless it has applied for exemption from this in law. If this is the case, then the company would be prohibited from distributing any profits it may make and would not be eligible for charitable status.

For full details of the statutory requirements involved in setting up a limited by guarantee company together with the information required and the cost, please check the package purchase page .

There are four simple steps in the 001 Formation Agent process:

1. Choose a company name

Once you have decided on the name you would like to use for your company, simply visit our homepage to check its availability straight away.

This quick search tool is connected to the database at Companies House and will immediately confirm if your chosen name is available to use and approved by Companies House.

If the proposed name of the company is too close to or the same as an existing company name then Companies House will not approve its use but our free search tool means that you can try as many variations of a name or a completely new name as many times as you like until you decide on one you would like to use that is available and can be approved.

2. Select a package

For each type of limited company available, 001 Formation Agent offers four different packages so you can choose what level of help and support you need both for the company’s incorporation and during its first year of trading.

The packages have been designed to suit every budget too and you can always add on any additional services you find you subsequently need from our excellent range.

3. Make payment

Once you have decided which package you would like, together with any additional services, simply make your selections and you will be asked to complete your order details and make payment through our secure process using a debit or credit card or via PayPal. An order confirmation and an invoice will then be emailed to you.

4. Complete your company’s details

Following receipt of your order and payment, you will be asked to complete a company incorporation document online which will prompt you to enter details of the company’s registered address , full details of its officers, its shareholders, SIC code and so forth.

On receipt of this, we will review the application for errors and omissions before submitting to Companies House and then your company will be formally incorporated and registered typically within 24 business hours at which time we will forward the company’s statutory incorporation documents.


For information on prices and packages, please check the package purchase page
The difference between a guarantor and a shareholder is the way in which they deal with profits. A guarantor will typically not take any profits from the business in the way a shareholder might. A guarantor usually re-invests in the company to fulfil the objectives or goals of the company whereas a shareholder might not.
A company limited by guarantee is characterised by having guarantees and guarantors. It does not have shares and shareholders. You'll typically see this type of company used by non-profit organisations.
A Company Limited by Guarantee cannot allocate profits of the company to members. However, it also depends on the provisions of the articles.

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