NCVO and Social Enterprise UK
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Company Limited by Guarantee

Who controls it? Board of Directors (or Board of Trustees if it has charitable status)
What is the governing document? Memorandum and Articles of Association
Who is the regulator? Companies House (and the Charity Commission if it has charitable status)
Does it have limited liability? Yes
What sources of finance are available? Grants and Loans
Is charitable status available? Yes

In a company limited by guarantee (CLG) there is no share capital and no shareholders. Instead, the members give a guarantee to cover a company’s liability. However, the guarantee is nominal, normally being limited to £1. The members of a CLG become its owners and have broadly the same powers as shareholders in a company limited by shares (CLS).

CLGs may receive grants and take out loans, but equity finance is not available to them.

Sometimes the word members is used for individuals who do not have any constitutional rights but simply have a contractual right to receive certain benefits from an organisation. These benefits might include access to a stately home or a newsletter. It is important that organisations maintain a clear understanding of the different types of membership.

Read more about involving stakeholders.