Ultimate Blogging Championship
Most Relevant Corporate Entities
Private Company Limited By Guarantee (LBG)
Commonly Used for
Non-Profit Organizations, Charities, or Clubs
Incorporation Requirements
Liability: Members are only responsible for a nominal guarantee (for example, £1).
Share Capital: The company does not issue shares and therefore has no shareholders.
Incorporation Requirements:
- At least one director is required.
- A minimum of one guarantor must be appointed.
- The company must maintain a company office address.
- A memorandum and articles of association are required (commonly adapted for nonprofit objectives).
- Registration must be completed with Companies House.
- Annual submission of returns and financial accounts is mandatory.
in the UK, a Company Limited by Guarantee (CLG) is a specific type of company structure without share capital, primarily used by non-profit organisations or community- focused entities.
What Is a Company Limited by Guarantee (CLG)?
Unlike a company limited by shares, a CLG does not have shareholders or share capital
Instead, it has guarantors, who agree to contribute a nominal amount (often £1) if the company is wound up.
Profits are not distributed to members — they are reinvested to support the company’s purpose.
Most Suitable Uses and Applications
- Charities
One of the most common structures for registered charities in the UK.
Offers limited liability for trustees and a formal, regulated framework.
If seeking charitable status, the CLG must have charitable objects and register with the Charity Commission.
- Clubs and Societies
Ideal for sports clubs, community groups, social enterprises, or amateur associations.
These groups benefit from:
Legal personality (can enter contracts, hold property, etc.)
Limited liability for members
- Non-Governmental Organisations (NGOs) and Non-Profits
Suitable for NGOs or voluntary organisations focused on humanitarian, environmental, or advocacy work.
Often used when public funding, donations, or grants are part of the business model.
- Community Interest Companies (CICs) – Limited by Guarantee
A CIC can be limited by guarantee or shares.
CICs are designed for social enterprises that want to use profits and assets for public good.
A CLG CIC provides structure and transparency while limiting private profit-taking.
- Educational and Training Institutions
Frequently used for academies, colleges, or training providers that want a formal and reputable structure without commercial
motives.
May also apply to private schools or arts education centres.
- Housing Associations / Co-operatives
Some housing associations or co-operative bodies choose this structure for its balance of legal structure, governance, and
non-profit status.
- Trade Associations or Industry Bodies
Used by industry groups, trade bodies, professional associations, and certification organisations.
Enables formal membership, income generation (e.g. from subscriptions), and service provision to members.
- Environmental or Conservation Groups
Conservation charities, wildlife trusts, and green energy co-operatives often use this structure when their goals are community
benefit rather than private gain.
- Arts and Cultural Organisations
Theatres, galleries, music groups, and festivals that are not commercially focused may form CLGs.
Often registered as charities or CICs.
Key Features that make it Suitable for These Uses
Feature
No Shareholders
Limited Liability
Separate Legal Entity
Not-for-Profit Model
Company House Registration
Can Apply for Charity Status
Flexible Membership
Eligible for Grant Funding
Benefit
Ideal for non-profits; no need to issue or manage shares
Guarantors’ liability is typically £1
Can enter contracts, own assets, and employ staff
Profits are reinvested, not distributed
Enhances public trust and credibility
Enables tax relief and access to charitable grants
Easy to add or remove guarantors; democratic structure possiblePreferred structure for many funding bodies and government grants
Common Real-World
Organisation Type
Charity
Club or Society
Arts Organisation
Environmental Group
Trade Association
Training Provider
Additional Legal Considerations
Must have Articles of Association stating its objects (often non-profit or charitable).
Can be run by directors or trustees (especially if a charity).
Subject to Companies Act 2006 and (if applicable) Charities Act.
Examples
Example Activities
Homeless shelters, animal rescues, education projects
Local football club, hobbyist group
Theatre companies, youth music initiatives
Community gardens, eco-awareness campaigns
Industry standards body
Skills development for disadvantaged groups
When Not to Use a CLG
Avoid using a CLG if:
You want to raise equity investment (no shares = no equity).
Your goal is to distribute profits to owners or investors.
You need a structure suited for commercial trading with private gain — a Limited by Shares company or LLP would be better