WHAT IS A COMPANY LIMITED BY GUARANTEE?

WHAT IS A COMPANY LIMITED BY GUARANTEE?

September 25, 2018

A company limited by guarantee is a company which does not have any shares or shareholders but is owned by guarantors who agree to pay a certain amount of money for company debts and the operation of the company. Where profits are made same does not go back to the guarantors it reverts to the operation of the company.

A company limited by guarantee is most times incorporated by non-profit organisations such as sports clubs, workers’ co-operatives and membership organisations, whose owners wish to have the benefit of limited financial liability instead of an NGO.

A company limited by guarantee is a distinct legal entity from its owners, and is responsible for its own debts and like the limited liability company structure, the personal finances of the company’s guarantors are protected. They will only be responsible for paying company debts up to the amount of their guarantees.

Read up blog post on How to register a company limited by guarantee.

The information in this blog post (“post”) is provided for general informational purposes only, no information contained in this post should be construed as legal advice, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through this post without seeking the appropriate legal or professional advice from the particular facts and circumstances at issue from a lawyer. This post is protected by intellectual property law and regulations. It may however be shared using appropriate sharing tools provided that our authorship is always acknowledged and this Disclaimer Notice attached.

Lucklyn Audu

Team 618bees

 

For Further inquiries;

www.618bees.com

info.618bees.com

012803791

 

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Frequently Asked

  • Why must I file Annual Returns?

    It is a mandatory statutory requirement under the Companies and Allied Matters Act to file Annual Returns yearly. 

  • What’s the difference between a business name and an LLC?
    • A business name is a sole proprietorship, usually owned and managed by one individual only. Legally, the sole proprietor and his business are one. It simply means an individual trading with an alias. The sole proprietor is personally liable for all business related obligations.

    • A limited liability company on the other hand is a separate business entity from the individuals that hold its shares and act as directors. Legally, it’s a separate business entity and a person on its own who can transact business, own property separate from its owners and can sue or be sued. 

  • What is SON?

    SON stands for ‘Standards Organization of Nigeria’

  • What’s the difference between a business name and an LLC?
    • A business name is a sole proprietorship, usually owned and managed by one individual only. Legally, the sole proprietor and his business are one. It simply means an individual trading with an alias. The sole proprietor is personally liable for all business related obligations.

    • A limited liability company on the other hand is a separate business entity from the individuals that hold its shares and act as directors. Legally, it’s a separate business entity and a person on its own who can transact business, own property separate from its owners and can sue or be sued. 

  • Can I trademark my logo and name separately? Why is this a good idea?

    Yes you can. The advantage is that it gives you the opportunity to have more than one logo or the opportunity to change your logo easily as opposed to registering the name and the logo as one trademark.

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