Companies Limited by Guarantee: What are they and how do they work?

Ownership

Members (guarantors)

Shareholders

Share capital

None

Yes

Profit distribution

Reinvested into objectives

Can be paid as dividends

Raising capital

Limited options

Can issue shares to investors

Liability

Members guarantee a fixed amount (e.g. £1)

Shareholders liable up to value of shares

Typical use

Charities, clubs, social enterprises

Commercial businesses