This type of company is suitable for non-profit making organisations such as voluntary groups, sports clubs, political organisations, and for one off or recurring events such as non-profit festivals and fairs. Companies limited by guarantee formed through Legal Clarity are not Charities, and are therefore not subject to the additional regulatory requirements imposed on Charities. The members of companies limited by guarantee (the equivalent of shareholders of a normal company) are not permitted to extract money from the company, even if the company has surplus funds. Features of a company limited by guarantee: Benefits from Limited Liability (each members’ liability is normally capped at £1). No initial investment is required for this type of company. This company can only carry out activities to meet objects specified on forming the company (for example ‘to provide a sports club for the local community’). This type of company does not issue shares or have shareholders. It only requires one person to form this type of company. Does not require a Company Secretary. Is not obliged to have its accounts audited by an accountant if it is a small company. You CANNOT convert this type of company into a Public Limited Company.