A company limited by guarantee is a UK limited company owned by guarantors instead of shareholders. Each guarantor promises a fixed sum, the guaranteed amount, which they only pay if the company can't pay its debts. These companies are usually non-profit or registered as charities and reinvest any profits instead of paying them out.
Most UK companies are limited by shares. The guarantee version exists for organisations that don't want owners taking profit: clubs, membership bodies, community groups, social enterprises and many charities. Everything here comes from the GOV.UK set-up guide and Companies House pages as they read in October 2026.
Limited by guarantee versus limited by shares
| Limited by guarantee | Limited by shares | |
|---|---|---|
| Owners | Guarantors (members) | Shareholders |
| How it's usually funded | Grants, donations or membership fees | Selling shares |
| Profits | Kept in the company or used for its purposes | Can be paid out as dividends |
| Owner's liability | Limited to the guaranteed amount | Limited to what they invested |
| Minimum owners | 1 guarantor | 1 shareholder |
| Model articles | Model articles for companies limited by guarantee | Model articles for companies limited by shares |
A company limited by guarantee can have a single guarantor who owns the whole company and is also its only director. So it isn't only for big committees.
Guarantors and the guaranteed amount
Guarantors are the company's members. They control the company and make the important decisions, they can also be directors, and they don't usually take profit out. When you register, you give Companies House each guarantor's details and their guaranteed amount.
Here's the insight people miss: the guarantee isn't a payment into the company and it isn't linked to how much the company is worth. You choose the figure, and it's only called on if the company can't pay its debts, for example when it's closed down. That's why GOV.UK suggests a low value, such as £1, to limit each guarantor's liability.
One control rule still applies: a guarantor with more than 25% of the voting rights is a person with significant control, and you'll confirm your PSCs during registration.
How to set one up
- Choose a name. It must usually end in "Limited" or "Ltd" (or the Welsh equivalents for a company registered in Wales).
- Pick an appropriate registered office address in the UK.
- Appoint at least one director, aged 16 or over. A company secretary is optional for a private company.
- Choose at least one guarantor and set the guaranteed amount.
- Prepare a memorandum of association and articles of association. If you register online, the memorandum is created for you.
- Verify each director's identity with Companies House, then register.
For the articles, Companies House publishes a separate set of model articles for private companies limited by guarantee, prescribed by the Companies (Model Articles) Regulations 2008. You can adopt them as they are or write your own. If you're setting up a community interest company, you can't use the limited company model articles and need the CIC regulator's model constitutions instead.
Directors, secretary and the memorandum
Guarantors and directors are separate roles, even when it's the same person. The company must have at least one director, aged 16 or over, and the directors are legally responsible for running the company and for making sure its accounts and reports are prepared correctly. Directors' names are public on the register, and each needs a service address that's also public. A company secretary is optional and can be a director, but can't be the company's auditor.
One detail that catches founders out: you can't update the memorandum of association once the company is registered. It's a one-off statement that the first guarantors agreed to form the company. Anything you'll want to change later, such as membership rules or how guarantors join and leave, belongs in the articles.
Registration fees as of October 2026
| Method | Fee | Typical time |
|---|---|---|
| Online with Companies House | £100 (debit or credit card) | Usually within 24 hours |
| By post on form IN01 | £124 (cheque) | 8 to 10 days |
If you want to leave "limited" out of the name, which some charities and membership bodies do, you must register by post. Companies House has a separate form for claiming that exemption.
The identity step is new for many people. My guide to Companies House identity verification walks through getting the personal code, and my step-by-step company registration guide covers the rest of the online service.
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After registration
A guarantee company has the same Companies House duties as any other private limited company: annual accounts, a yearly confirmation statement, and reporting changes to directors, secretaries and people with significant control within 14 days. Registering as a charity, if that's your aim, is a separate step with the charity regulator.
My verdict
Choose a company limited by guarantee when the point of the organisation is the mission, not a return for owners. It gives the board limited liability, a clear legal identity for grants and contracts, and a structure charities recognise. Set the guarantee at £1 unless there's a reason not to, adopt the model articles if your rules are simple, and only go bespoke when you need membership classes or special voting rules.
Frequently asked questions
What does limited by guarantee mean?
It means the owners, called guarantors, have promised a fixed guaranteed amount instead of buying shares. Their liability is limited to that amount, which they pay only if the company can't pay its debts.
Can a company limited by guarantee make a profit?
It can make a surplus, but it invests its profits back into the business instead of paying them to its owners. Guarantors don't usually take profit from the company.
How much should the guarantee be?
You choose the amount. GOV.UK says you can set it to a low value, for example £1, to limit each guarantor's liability.
How many guarantors do you need?
At least one. A company limited by guarantee can have one guarantor who owns the whole company and acts as its only director.
How much does it cost to register?
As of October 2026, registering online costs £100 and usually takes 24 hours. Registering by post costs £124 and takes 8 to 10 days.
Can a company limited by guarantee drop Limited from its name?
It can apply for an exemption, but GOV.UK says that if you don't want to use limited in the company name you must register by post rather than online, and Companies House has a separate form for the exemption.
