Company limited by guarantee

What is it?

A company limited by guarantee (CLG) is a company that does not have any shares, and is therefore unable to make a distribution of its profit to its members. It is a legal person and so can own property, sue and be sued. The directors and members have limited liability for the actions of the company. Some CLGs are charitable companies. A CLG structure is commonly used by social enterprises that are not charities (as well as by charities), since many social enterprises are “not for profit” and a CLG cannot pay dividends.

What are the accounting and filing requirements?

  • Accounts need to comply with the Companies Act 2006 and the FRSSE.
  • Accounts need to be filed at Companies House within 9 months of the year end. Also needs to complete an Annual return for Companies House.

What are the tax implications?

  • Must register for VAT if making taxable supplies over the threshold.
  • Must file a corporation tax return. If the activity of the CLG is non-business and philanthropic then it may be possible to get HMRC to make the corporation tax record dormant, so that returns do not need to be filed.

Slade & Cooper services

  • Preparation of accounts and accountant’s report
  • VAT advice so you know when registration might be necessary, and can deal with any partial exemption and outside the scope issues.
  • Corporation tax returns and iXBRL tagging of the accounts
  • Payroll bureau
  • If taxable activity is insignificant we can help to have the organisation’s tax record made dormant.

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