Companies Limited by Guarantee
We can incorporate for you a UK company Limited by Guarantee.
A company Limited by Guarantee does not have a share capital or shareholders, instead it has members who act as guarantors and the guarantors give an undertaking to contribute a nominal amount, typically £1 in the event of the winding up of the company.
Advantages of Companies Limited by Guarantee
The biggest benefit of incorporating a company limited by guarantee, is that those managing the company are not personally liable for any debts the organisation may incur.
- Individual members are almost totally protected against liability
- They can buy and sell property in the name of the organisation
- Companies are generally democratic organisations – they have a membership
Flat Management Companies
Where there are multiple tenants a Flat Management Company is normally used to protect the interests of the leaseholders. We can either incorporate the flat management company for you as a Limited Liability Company or Limited by Guarantee Company.
A Flat Management Company has its Memorandum and Articles of Association specially drawn up to allow the company to own, manage and administer a freehold property, which is normally divided into several dwelling units or flats, with each leaseholder becoming a member of the company.
If your company is limited by guarantee, it means that the members have agreed to contribute to the assets of the company if it is wound up.
Reasons for a limited company
One reason why residents of a block of flats would have a company is to own the freehold or ‘head lease’.
The company is often used for collecting funds to carry out repairs and maintenance on common parts of the property. Usually it is an automatic condition of buying a flat that the buyer becomes a member of the existing company.
Another reason why a company would be set up is so that leaseholders of flats can exercise their right to manage the building they live in. The right to manage will be through a limited company set up specifically for that purpose.