Differences and similarities between a company limited by guarantee and a Non-Governmental organisation

There are similarities between a company limited by guarantee and a non- governmental organization, but these similarities do not make them the same. This article intends to highlight the similarities and differences between a company limited by guarantee and a non-governmental organization.

SIMILARITIES

• The objective of a company limited by guarantee and a non-governmental organization is for a charitable cause and promotion of social agenda or religious group.
• A company limited by guarantee and a non -governmental organization do not have a profit sharing formula neither do they distribute profit to the members of the company.
• Upon winding up of both there is a requirement of transfer of object of the company to a similar organization or company with similar object.
• Upon the winding up of both, assets of the organization or company are not distributed to members.
• Both company limited by guarantee and non-governmental organisations are exempted from tax.

DIFFERENCES

• A company limited by guarantee is allowed to venture into business or profit making agenda but cannot share the profit among members; but Incorporated Trustees are not allowed to venture into profit making business.
• They have different registration requirements by the Corporate Affairs Commission (CAC). For instance, a company limited by guarantee is required to seek and get the consent of the Attorney general of the federation. Whereas, an incorporated trustee does not need such consent.
• The registration of an incorporated trustee requires newspaper publication before incorporation whereas a company limited by guarantee does not have such requirement.

• Memorandum and Articles of Association are required to register a company limited by guarantee but Incorporated Trustees require Constitution.

Team 618bees

For Further inquiries;

www.618bees.com

info.618bees.com

012803791

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.