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.