Company Limited by Guarantee


A company registered at Companies House, owned by the guarantee members. The guarantee members agree to pay £1 (usually) to the company in the event of a winding up. This kind of company has no beneficial owners. The company cannot pay dividends to its members out of profits. The AGM of the company elects the directors and approves the accounts. Members can vote at the AGM. Companies are governed by the Companies Act 2006.

 Accounting regulations

Must prepare accounts in accordance with:

  • Companies Act 2006
  • Small Companies Regulations
  • FRS102 (section 1A if applicable)

 Tax implications

  • Subject to corporation tax
  • Unable to distribute post-tax profits by way of dividend


  • Can have a non-profit aim as its main objective
  • Cheap and easy to create
  • Limited liability
  • High audit threshold – unlikely to need an audit
  • Listed on Companies House website, and all directors’ details and filings available there
  • Employer Related Securities regulations do not apply
  • May be eligible for some VAT exemptions such as education and culture


  • Cannot pay a dividend and so exploit the tax advantages of dividends; can only reward people by wages, or contracted freelance payments.
  • The Financial Services and Markets Act 2000 applies, so cannot advertise for loan investment from the public, therefore this structure is not a good investment vehicle

Services required

  • Accounts preparation
  • iXBRL tagging of accounts and filing online with Corporation Tax form CT600