Limited company guide
How a company limited by guarantee works, members and guarantees instead of shares, who uses the structure, how it is taxed and what it must file.
Written and reviewed by Waqas Sagar Member of ICAEW, Fellow of ACCA, Fellow of AAT, a double graduate and entrepreneur at heart, helping startups grow and serving thousands of businesses nationwide with an excellent team. Published by LimitedCompany.Accountants, 12 London Road, Morden, London SM4 5BQ. Reviewed 12 September 2026 against 2026/27 UK rates and current Companies House and HMRC guidance.
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QuickBooks PartnerCertified ProAdvisor100+ yearsCombined team experienceFully insuredUp to £2m indemnityA company limited by guarantee has members rather than shareholders. Each member guarantees a nominal amount, commonly £1, payable if the company is wound up. There is no share capital and no dividends.
Members guarantee, they do not own shares
Who uses it
Tax treatment
What it files
A company limited by guarantee has members rather than shareholders. Each member guarantees a nominal amount, commonly £1, payable if the company is wound up. There is no share capital and no dividends.
Because nobody holds shares, there is no capital value to extract, which is exactly why the structure suits organisations where the surplus should stay in the organisation.
Clubs, societies, membership bodies, trade associations, sports associations, residents' management companies, charities that want incorporation, and CICs that do not need share capital.
It gives limited liability and separate legal personality to a group activity without creating ownership value for individuals.
For tax it is an ordinary company: corporation tax at 19% to 25% on taxable profit, VAT if it passes the threshold, PAYE if it has staff. Registering as a charity is what brings exemptions, not the guarantee structure itself.
Mutual trading, where members trade with their own association, can put certain surpluses outside the charge to corporation tax, but investment income and trading with non-members remain taxable. The analysis needs care.
Annual accounts to Companies House within nine months of the accounting reference date, a corporation tax return where HMRC requires one, and a confirmation statement each year.
Members appear on the register rather than shareholders, and directors are often called trustees or committee members in the articles without changing their legal duties.
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Frequently asked
Yes, but it cannot distribute it to members as dividends. Surpluses are retained and applied to the company's objects.
No. The structure is commonly used by non-profits because value cannot be extracted, but the tax treatment is that of an ordinary company unless charitable status is obtained.
Not directly in most cases. The usual route is to incorporate a new company and transfer the activity, which needs planning for tax and for any asset lock in the articles.
Keep bank statements, sales and platform reports, purchase invoices, payroll records, VAT workings, finance agreements and Companies House correspondence. We confirm the exact list at onboarding and identify gaps before a filing deadline becomes urgent.
The fee depends on transaction volume, record quality, VAT and payroll requirements, historic catch-up and the level of reporting needed. We agree a fixed scope and price before technical work starts, with published packages available on our fees page.
Yes. We request professional clearance, collect the prior records and authorities, check the next Companies House and HMRC deadlines, and give you one clear handover list. The process is normally completed remotely.
Yes. We work through secure cloud records, scheduled reviews and digital approvals, while keeping a named team available by phone, video call and email. Clients can also visit our Morden office by appointment.
We regularly work with Xero, QuickBooks, FreeAgent, Sage and connected sales or expense apps. The right setup depends on transaction volume, integrations and the reports you need, not simply the software brand.
The relevant calendar may include annual accounts, Corporation Tax payment and return dates, confirmation statements, VAT returns, payroll submissions and Self Assessment. We map the dates from your company year end and registrations.
No. This page explains general UK rules and common accounting treatment. Your facts, contracts and wider tax position must be reviewed before you rely on a conclusion.
Included approach
Check the current rules
Deadlines, thresholds and filing rules change. GOV.UK and Companies House publish the current statutory position; advice should then be applied to your company’s circumstances.
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