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Company Limited by Guarantee under Companies Act 2013

The Companies Act, 2013 ("the Act")

Definition of a Company Limited by Guarantee

A "company limited by guarantee" is defined in clause (21) of section 2 of the Act as "a company having the liability of its members limited by the memorandum to such amount as the members may respectively undertake to contribute to the assets of the company in the event of its being wound up".

A company formed for any lawful purpose can be registered as a company limited by guarantee. Ref: Section 3(2)(b) of the Act

Types of Company limited by guarantee

A company limited by guarantee can be formed either as:
(1) a company limited by guarantee and having a share capital, or
(2) a company limited by guarantee and not having a share capital.




Memorandum of Association

The Memorandum of Association of a company limited by guarantee can be as per:
  Table B (for companies not having a share capital); and
  Table C (for companies having a share capital).

Tables B & C are given in Schedule I of the Act.

Articles of Association
 
The Articles of Association of a company limited by guarantee can be as per:
  Table G (for companies having a share capital); and
  Table H (for companies not having a share capital).

Table G and Table H are given in Schedule I of the Act.

Participation in the Divisible Profits

• In case of a company limited by guarantee and not having a share capital,
• any provision in the Memorandum of Association (MoA) or Articles of Association (AoA),
• purporting to give any person otherwise than as a member a right to participate in the company's divisible profits,
• shall be considered as void.

Ref: Section 4(7) of the Act




Number of Active Companies Limited by Guarantee in India

As on 30th November, 2019, there were a total of 7,252 companies limited by guarantee out of the total 1,165,156 active companies in India.

Stats on Number of Newly incorporated Companies limited by guarantee:


Category
Government
Non-Government
Grand Total
Month
Public
Private
Public
Private
November, 2019
0
0
0
57
57
October, 2019
1
0
4
73
78
September, 2019
0
1
2
67
70

Ref: MCA portal

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