COMPANY LIMITED BY GUARANTEE (LBG)
To order a Company Limited by Guarantee registration service call, text or WhatsApp to speak to one of our experts.
Read more about Companies Limited by Guarantee including the advantages of registering a Company Limited by Guarantee and what information you need to provide below ↓.
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A company limited by guarantee is a type of company that does not have a share capital or shareholders. Here are some key things to know:
- Members act as guarantors rather than shareholders. Their liability is limited to a nominal amount stated in the company’s articles (e.g. ZWL1.00).
- Commonly used for non-profit organizations like charities, membership associations, trade bodies, etc.
- Governed similarly to private limited companies with a board of directors/trustees managing the organization.
- Used when the organization does not want profits to be distributed to members. Any funds raised go back into the company’s activities.
- Registration process is the same as a private limited company, but the memorandum of association is structured differently.
- Directors still owe fiduciary duties but members have reduced responsibilities compared to shareholder companies.
- Permitted to carry on commercial activities in line with its charitable/non-profit aims to sustain operations.
- Subject to the same ongoing compliance as private limited companies, including statutory accounting/reporting.
So in summary, it provides a formal structure for non-profit groups without share capital or dividend rights for members. Limited liability is balanced by guarantees.
What are the advantages?
Here are some key advantages of a company limited by guarantee:
- Limited liability – Members’ liability is limited to a nominal amount in the event the company winds up or faces debts.
- Separate legal identity – The company is treated separately from its members/directors for legal and tax purposes.
- Continuity – The company continues existing regardless of changes to members/directors, providing continuity for operations.
- Tax exemption potential – Charities registered by guarantee may qualify for certain tax exemptions.
- Credibility – Operating as a formal company structure can enhance credibility with donors, partners, etc.
- Access funding – Easier to apply for grants/donations that require an established legal entity.
- Distribution rules – Clearer rules around no profits/assets being distributed to members.
- Regulation protection – Duties and liabilities for members are lighter than shareholder regulations.
- Flexible purposes – Suitable for charities, associations, trade bodies, other non-profits and social enterprises.
So in summary, it combines benefits of incorporation with rules suitable for organizations without profit/dividend objectives.
Requirements for registering a Company Limited by Guarantee
Minimum of 1 member (director can also be a member).
Unique company name.
Registered office address in Zimbabwe.
At least two directors.
Once submitted, company registration usually takes between 25 – 30 working days.
Once an entity is set up, we provide a range of services to keep it in good standing—from post incorporation technical support to ongoing renewal and maintenance services—allowing clients to focus on their core business.
NUMERI OFFERS SERVICES TO INDIVIDUALS, SMALL TO MEDIUM ENTERPRISES (SME's), FAMILY OWNED BUSINESSES (FOB's) OR THOSE COMING IN THE ZIMBABWEAN JURIDICTION FOR THE VERY FIRST TIME, SPECIALISING IN BUSINESS ESTABLISHMENT, CORPORATE SECRETARIAL, TAXATION, FIDUCIARY SERVICES AND ADVISORY.
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