The LBG companies are the most suitable option for charitable foundations. So, all the charities, start-ups, or established ones along with non-profit organizations. This model of the company is ideal for non-profit societies, sports groups, universities, schools, charity associations, volunteers, and such.
The package for LBG in the UK includes –
LBG – Limited by Guarantee formation service
Certificate of Incorporation
Included free of cost with company formation service.
Firstly, LBG Company is the ideal structure for non-profit organizations.
It requires one director to the very least.
Additionally, for LBG in the UK, the director can be the guarantor.
However, the number of directors or guarantors has no limitation. The Articles of Association determines the number.
The LBG company structure has no shares or shareholders.
Having a registered office address is mandatory for LBG companies.
What is the meaning of a company limited by guarantee?
LBG or limited by guarantee company is different than the structures based on equity. It comes with no shareholders or there’s no shared capital. Instead, an LBG structure consists of members who are the guarantors of the company. In this regard, the guarantors here are also called trustees or governors, or committee members. The title depends on the organization itself.
And, each guarantor has some tasks or duties towards the company. These are –
Formation of projects
Setting up the corporate priorities and objectives
Handling day to day activities
Agreements regarding the competence of the directors
Requirements for Forming an LBG Company
There has to be at least one guarantor and one principal
A guarantor can work in several positions or you can have different managers for different jobs
Details of all the directors and guarantors have to be there on the public records
During company formation, the address of the registered office and the details are mandatory
The company’s official address has to be published for public records (should be a complete postal address)
Need the completion of an Association Memorandum
During establishing the company, must follow the Articles of Association
Our LBG Company Formation Package Includes:
Limited Company formation service
Certificate of Incorporation
An address for VAT registration
Handling Payments of Companies House filing fee
Free Online Company Manager for Maintaining the Company
Ready to trade limited liability partnership
PDF Files containing Statutory Books
PDF File for the Certificate of Incorporation
A Registered Office
PDF Files containing all the Share Certificate(s)
Free of cost online consultation for the Company
DF File containing information of Memorandum & Articles of Association
PDF File containing information of Minutes of the first meeting of Directors
Web authentication code to update Companies House records
LBGs with Objects and Services of the Charity
In order to be able to get registered with the Charity Commission, a company’s annual gross profit has to be above £6000. And, if a business has less than £6000 of gross profit, the entity can obtain tax exemptions from HMRC. However, this happens when the items of the company are charitable and the Articles puts a restriction on using funds and profits for charity purposes.
Furthermore, the service will provide Association Articles. And, you will have to edit these. To be able to achieve the tax exemption requirements of HMRC, well-written documents are the key.
Understand the Risk of Using the Word Charity with your Company’s Name
According to the Companies Act of the UK, the word “Charity” is a sensitive term. Thus, you can only add the term with your company’s name when you are registered with the Charities Commissions.
Therefore, one must incorporate their business first. And then, register with the Charities Commissions upon being able to fulfill the requirements. So, if you use Charity in the name, it is better to change it until the grounds are met.
LBG of Charitable Objects and Association Articles
Articles of Association demand the amendment of provisions that are allowed by the Company Acts for HMRC. This is the legal gateway for obtaining tax exemptions if the annual turnover is less than £5000. Also, it will be applicable if your business does not contain the suffix LTD in the company’s name.
The clauses for removing LTD from the company’s name are –
A clause stating the company's charitable objects
Another clause stating that the revenue of the business will be used to promote its artifacts
One clause that will prohibit the income of the company from being distributed to its members
A provision that demands the transfer of all the properties of the members to another entity having items that are identical to the business