Limited Liability Company By Guarantee

A Company Limited by guarantee is ‘a company having the liability of its members limited by the memorandum to such amount as the members agree may respectively thereby undertake to contribute to the assets of the company in the event of it being wound up.’ Therefore, the members of the company do not have to pay anything unless the company is wound up and the amount is limited to the amount agreed on the memorandum. In such companies no shares are issued as the members do not contribute to the capital of the company, such companies are usually non profitable.