DIFFERENCES AND SIMILARITIES BETWEEN COMPANY LIMITED BY GUARANTEE AND 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.

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