Companies - Introduction explaning CLS, CLG, CIC
Companies can be either limited by shares (CLS) or limited by guarantee (CLG). Community interest companies (CICs) are a type of company and can be either CLS or CLG.
CLGs are traditionally associated with charities, trade associations and not-for-profit organisations.
CLSs are divided into private companies (which make up the great majority) and public limited companies (plcs) which are subject to particularly stringent accounting standards and can offer their shares to the general public. Many (but not all) plcs are listed on the stock market so that their shares can be easily bought and sold. Although there are some plcs that are social enterprises they will very rarely be listed.
The main difference between the two forms is that a CLS has something called share capital, whereas the CLG does not. This share capital is a nominal figure which is used to represent the total net assets of the company and is the technical mechanism that allows CLS to be used to raise equity finance.