LBG Company Formation
Companies Limited by Guarantee (LBG) are usually set up by non-commercial organisations such as user groups, trade associations, social clubs and co-operatives
You can register your new limited by guarantee company at Companies House with our quick and simple online set up process
Ready-To-Trade LBG Company
Digital (PDF) Company Documents
Partnership Agreement Template
Free Administration Support
Service Overview
Please note the following:
- This product provides a “not-for-profit” LBG, not a registered charity or Charitable Incorporated Organisation (CIO)
- The company will have the suffix “LTD” or “Limited” in its name, indicating that it is a limited liability company, albeit limited by guarantee. Limited liability means that the members or subscribers cannot be liable for the debts of the company beyond the amount for which they give a guarantee.
- Companies Limited by Guarantee are liable to corporation tax on any profits or surpluses, even if they are run as “not-for-profit” organisations.
- The Articles of Association supplied by us, for this product, cannot be edited during the application. This product will also not allow the substitution of alternative Articles of Association.
- The Articles of Association are drafted for a small membership and suitable for up to 5 or 6 members. If your membership is larger, you should use our editable articles pack which allows you to supply your own or edit the articles we provide.
- Members do not have to be directors of a company and directors do not have to become members.
Articles of Association:
The articles of association are the written constitution of the company and set out how the company will be run. The Articles are agreed by the company’s founding members (alternatively known as guarantors or subscribers).The following sets out the key features of the Articles of Association we supply with this product:
- The liability of each member is capped at the amount stated in the articles and is usually £1, but can be anything the founders decide.
- Each member is liable for the amount stated during the time he or she is a member and for up to one year after membership ceases.
- Members are required to give 7 days notice to withdraw their membership
- Unlike shares held in a company,membership is not transferable
- Unlike shareholders in a company, each member only has 1 vote at company meetings.
- There is no restriction on directors remuneration (unlike a charity)
Annual Compliance Requirements:
- Like all companies registered with Companies House, your LBG will have to file yearly accounts made up to the accounting reference date.
- An annual confirmation statement is also required stating details of directors, members, PSCs and any changes to the total guaranteed. Companies House charge a filing fee of £13.
- You will be required to submit a Corporation tax return each year, even if no tax is payable.
When you make your application with us, you will be asked to decide the following:
- The Limit of each members liability; most applicants choose £1, but it can be more.
- The directors of the company.
- The members/guarantors of the company. In small organisations, they usually are also the directors.
- You will have to state if there are any Persons of significant control (PSCs). A PSC is anyone who controls more than 25% of the company. Given that the Articles of Association only allow for 1 member 1 vote. A company with 4 or more members will not have any PSCs. A company with a membership of 3 or less will state they are each PSCs.
- The Standard Industrial Classification (SIC) code. At least one needs to be selected from the drop-down list we make available to you.
- The address of the Registered office. This will be the official address of the company and will be available to members of the public. It will need to be displayed on websites, letters, invoices and other communications.
- Each director’s and member’s service address. You will also have to supply each directors personal address to Companies House. A service address for the directors is the only way to avoid displaying their home address.
General Compliance Matters:
All limited companies are governed by the regulations of the Companies Acts 2006, and the directors of your company will need to ensure compliance with that Act. In particular:
- You are required to maintain statutory books giving details of the company, its directors, members, PSCs , any debentures issued, mortgages and other matters.
- The statutory books will also need to be made available to the public if they request access.
- Changes of directors and PSCs (registerable events) will need to be notified to Companies House within prescribed periods.
Articles of Association:
The company can agree to change the Articles of Association. The new Articles and the Resolution adopting the amended Articles will need to be sent to Companies House.
Changes in Membership:
The company can admit new members. They will not appear on the original Memorandum of Association but, they will have the same rights as the original members.
Naming your LBG:
Companies House have rules about the names that companies can be given. The rules ensure the public are not misled about a company. A list of sensitive and regulated words are published on their website. Their website also states what evidence should be provided with an application in order to have a name approved. If you are using a sensitive word, our system will allow you to upload the supporting evidence with your application.
The following is a sample of words that are more commonly used in the names of LBG companies which require additional information before Companies House will accept them:
Association, Benevolent, Charity, Charitable, Commission, Community Benefit Society, Co-operative,Council, Federation, Foundation, Friendly Society, Fund, Institute, Society
More information about supporting evidence is given on the Companies House website