Overview of Company Limited By Guarantee Incorporation
A company Company Limited By Guarantee (Ltd/Gte) is just a limited company, but with the obvious difference to the usual company entity of there being no share capital. The company’s members are guarantors rather than shareholders.
This form of company entity is often used by charities, but not all companies limited by guarantee are charitable in nature. Other common uses for this type of company are membership organisations and clubs, including sports associations.
Such type of company has a separate legal entity and can carry out various activities in the name of the business such as borrowing credit, employing human resource, buying or selling of property, etc. It is less likely to be used by a normal trading business, as profits cannot be distributed to members by way of a dividend.
Features of Private Company Limited By Guarantee Incorporation
Here are some of the salient features of Company Limited By Guarantee (Ltd/Gte):
In a company limited by guarantee, there are no shareholders, but the company must have one or more members.
Not for profit
Company limited by guarantee should include the suffix ‘’LTD/GTE’’ in its name. This word gives a kind of trust to clients and investors.
A minimum of one director and one guarantor are mandatory for the establishment of the company. It is also possible that the same person handles the mantle of both a guarantor and a director.
No share capital
This type of company cannot have a share capital, limiting its fund-raising capacity because it does not give shares to those who join or support it.
Upon the winding-up of a company LTD/GTE, any part of the company’s funds or assets which is left over, after discharging all its debts and liabilities, shall not be distributed among the members, but shall be transferred to another similar company with similar objects or other charitable purposes determined by the members prior to its dissolution.
The Attorney General of the Federation is required to grant approval for the incorporation of a Ltd/Gte where there are no objections or other cogent reasons for refusal.
Memorandum & Articles (M&A)
The Memorandum & Articles constitutes a contract between the company, each member and between the members themselves as well. The objects of a Company Limited by Guarantee (Ltd/Gte) as set out in the Memorandum are usually charitable in nature or for the fulfilment of some social need.
Benefits of Company Limited By Guarantee Incorporation
The key benefits of a Ltd/Gte Registration are listed below:
Requirements for registering a Private Company Limited by Guarantee in Nigeria
You'll have to provide the following details upon Submission;
- The name of the Guarantee company - 2 names (A name availability check will be conducted at the CAC and when one of the 2 proposed names is available, the name will be reserved).
- The general nature of the business of the Guarantee company;
- The principal place of business of the Guarantee company;
- At least 1 director who is ordinarily resident in Nigeria
- At least 1 member
- Qualified Company Secretary
- Constitution (Memorandum & Articles of Association) setting out the objects and by-laws.
Where the above requirements have been complied with, the CAC shall within 40 days of the submission of the application register the Guarantee company and issue a digital certificate of incorporation stating the name, date, and registration number of the Ltd/Gte.
Here are some of the features to expect from our Company Limited By Guarantee Incorporation Packages.
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