Limited By Guarantee
A Company Limited by Guarantee is a company without shareholders or shares. This type of entity is typically used by social enterprises and is controlled by members, who guarantee a nominal sum of money to the company in the event of its becoming insolvent or winding up.
Registering a Company Limited by Guarantee is easy with Kudi Konsult. Our team of legal experts and accredited CAC Consultants have helped lots of Clients register Companies Limited by Guarantee with CAC.
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FAQs On Company Limited By Guarantee
A Company Limited by Guarantee differs from a Company with Shares primarily in structure and purpose. The former is usually adopted by non-profit organizations, with members guaranteeing a fixed amount to cover liabilities, rather than shareholders. In contrast, a Company with Shares is profit-oriented, with ownership divided into shares held by shareholders. Profits are often distributed as dividends among shareholders, which is not the case in Companies Limited by Guarantee.
A Company Limited by Guarantee and Incorporated Trustees differ mainly in structure and purpose. A Company Limited by Guarantee is used by non-profit organizations, where members guarantee a contribution towards the company’s liabilities. Incorporated Trustees, however, are formed by a group of people (trustees) who come together for a common non-profit goal, often for religious, educational, literary, scientific, social development, or sporting purposes. The key difference lies in their legal and operational structures, with Incorporated Trustees typically being more suitable for groups aiming to exist perpetually, managing property and funds dedicated to their specific non-profit goals.
There is no maximum limit set by CAMA but it states that each member shall guarantee to pay a sum not less than 10,000 naira.
To complete the registration process for a Company Limited by Guarantee in Nigeria, follow these steps:
- Name Reservation & Registration Application:
- Apply to the Corporate Affairs Commission for consent to reserve a name and begin registration.
- Submit two proposed company names, details of directors and secretary, company objectives, and the guarantee amount by members for winding up.
- Application to the Attorney General:
- Within 30 days, apply to the Attorney General of the Federation for authorization to register the company.
- If there are no objections, or no reasonable cause to refuse the application, and if no decision is made within 30 days:
- Public Advertisement:
- Place an advertisement in 3 national newspapers for 28 days, inviting public objections, if any.
- Complete Registration on CAC Portal:
- Conclude the registration process on the CAC Company Registration Portal, including document uploads.
- Final Approval:
- Await final approval from the Commission.
Yes, a director of the company can be a guarantor as well but it is not mandatory for a guarantor to be a director.
No, this is impossible as CAMA states that upon winding up of the company, the remaining assets shall be transferred to a company with similar objects.