Accounting

Company formation & filings

Limited by guarantee company formation

A company limited by guarantee is a private limited company without share capital. Instead of shareholders it has members, each of whom guarantees to contribute a nominal amount, almost always £1, towards the company's debts if it is wound up while they are a member or within a year of leaving. That guarantee is the limit of their liability. Because there are no shares there are no dividends and no owners in the commercial sense, which is why the form is the standard choice for organisations that need legal personality and limited liability but exist for a purpose rather than for profit: sports and social clubs, community groups, arts and heritage bodies, trade associations and most charities that are companies.

from £49 · fixed + £100 Companies House fee · plus £100 Companies House fee

Next deadlines

  • Companies House identity verification for directors and PSCs, phased in from 18 November 2025
  • Confirmation statement due within 14 days of your review date, at least once every 12 months
  • Companies House accounts due 9 months after your year end (a 31 December year end files by 30 September)
  • Corporation Tax payment, 9 months and 1 day after your year end (a 31 December year end pays by 1 October)

Fees

Packages, fixed and published

£49

Limited by guarantee formation

£99

Formation with bespoke objects clause drafted

£119

Formation + HMRC registrations

£199

Formation + first-year filings bundle (confirmation statement + accounts)

The Companies House fee of £100 is charged by Companies House, shown separately on your quote and passed on at cost. It is not part of our fee.

Who this is for

Limited by Guarantee Formation

Voluntary and not-for-profit organisations across the UK: sports and social clubs, community groups and residents' associations, arts and heritage organisations, groups preparing to register as a charity, social enterprises that do not want share capital, professional and trade associations, and existing unincorporated groups whose trustees want limited liability.

What is included

Inside the fixed fee

  • Name check including the rules on charitable and sensitive words
  • Articles of association suited to a guarantee company, with model or bespoke objects and member provisions
  • Guarantors (members) and directors set up correctly, with identity verification guidance
  • Non-profit clauses such as asset lock or prohibition on distributions where you need them for grant or charity status
  • HMRC registration and, where relevant, notification of non-trading or charitable status
  • First-year filing calendar: confirmation statement, accounts and any charity regulator deadlines

In detail

How limited by guarantee formation works

Our formation fee is £49 plus the Companies House incorporation fee of £100, shown separately and passed on at cost. The model articles for guarantee companies suit a simple club. Organisations that intend to register as a charity, need an asset lock for funders, want classes of membership or particular voting arrangements, or must satisfy a league, landlord or regulator need bespoke articles, which the £99 package drafts with the objects clause and provisions required. The £119 package adds HMRC registration and the notification of non-trading or charitable status where relevant; the £199 bundle adds the first confirmation statement and first accounts so that a volunteer committee is not caught by the first-year deadlines.

The distinction between legal form and charitable status causes most confusion. A guarantee company is a form registered at Companies House; a charity is a status granted by the Charity Commission in England and Wales, OSCR in Scotland or the Charity Commission for Northern Ireland, and a charitable company has both registrations and reports to both. Groups that will certainly be charities and do not need to be on the companies register may be better served by a charitable incorporated organisation, which reports only to the charity regulator; we explain the trade-off honestly even though we do not form CIOs. Groups that want a non-profit structure without charity status, such as a members' club or a social enterprise, use the guarantee company alone.

Formation follows the same process as any company. Directors must verify their identity with Companies House under the rules in force since November 2025, and members who hold more than 25% of the voting rights are people with significant control who must verify too. Sensitive words in the name, including "charity", "association", "foundation" and "institute", may require supporting evidence. Once incorporated, the company has the standard obligations: a confirmation statement each year with the £50 Companies House fee, accounts within nine months of the year end, and a Corporation Tax return unless HMRC agrees the company is dormant or non-trading. Guarantee companies can employ staff, trade and charge fees; the restriction is on distributing profit to members, not on earning it, and trading profits may be taxable unless a charitable, mutual or club exemption applies.

For an existing unincorporated club or association, incorporation means forming the new company and transferring the assets, contracts, lease, bank account and any registrations to it before dissolving the old body under its own constitution. We form the company and provide the transfer checklist; lease assignments usually need a solicitor. After incorporation our dormant company accounts service at £49 covers guarantee companies with no transactions, and the limited company accounts service covers those that trade. Everything is handled online, fees are fixed and agreed before we start, and the first-year deadlines are diarised and chased for every company we form.

Process

From first message to filed

  1. Tell us your situation

    A short message or call about what you do and what needs filing. We ask the questions that determine the right package and nothing more.

  2. Fixed fee in writing

    You receive one price for the work, confirmed by email before anything starts. It does not change if the job takes longer than we expected.

  3. Send records, review the draft

    Records come by WhatsApp or email. We prepare the draft, explain the figures in plain English and answer your questions.

  4. We file, you get the receipts

    Once you approve and the fee is settled, we submit electronically and forward the HMRC or Companies House acknowledgement the same day.

Worth knowing

Rules that come up in this work

Dormant companies

Companies formed to protect a name or hold a future business are dormant but not exempt: Companies House still expects dormant accounts within nine months of the year end and a confirmation statement annually with its £50 fee, and HMRC must be told the company is dormant or it will demand Corporation Tax returns. The filings are short, but the penalties for missing them are the same as for a trading company.

The trading and property allowances

Small side incomes are covered by two £1,000 allowances, one for trading and one for property, which remove the need to register or report income below that level. Once income exceeds £1,000, the allowance can be used in place of expenses, a choice worth making deliberately: a freelancer with £900 of costs is better off with the allowance, one with £3,000 is not.

Employer National Insurance

The cost of an employee is more than the salary. Employer National Insurance at 15% above £5,000 a year, the 3% minimum pension contribution, holiday pay, equipment and management time all come on top. The Employment Allowance of £10,500 reduces the National Insurance for most employers with more than one person on the payroll.

Workplace pensions and auto-enrolment

Workplace pension compliance is part of payroll, not separate from it. Each pay period the payroll assesses who is eligible, calculates employer and employee contributions on qualifying earnings between the lower and upper thresholds, and sends the contribution file to the scheme. The minimum total is 8%, and many employers choose to contribute more as a recruitment advantage.

Record keeping

Record keeping is a legal obligation with a penalty of up to £3,000 for failure, but its real value is in making every other filing cheaper and more defensible. Keep invoices, receipts, bank statements, mileage logs and any HMRC correspondence, digitally if you like, for five years after the relevant filing deadline for individuals and six years for companies and VAT.

Allowable expenses

The expenses sole traders most often miss are home working costs, claimed by actual proportion or HMRC's flat rate, the business share of phone and internet, mileage at 45p for the first 10,000 business miles, and training that maintains existing skills. The ones most often claimed wrongly are commuting, entertaining customers and clothes that could be worn outside work.

Crypto records and reporting

HMRC treats cryptoassets as property. Swapping one token for another, spending crypto or gifting it are all disposals for Capital Gains Tax, and staking and lending rewards are income. Gains are computed under pooling rules with same-day and 30-day matching. From 2026 HMRC receives data from exchanges worldwide under the Cryptoasset Reporting Framework, so unreported activity is increasingly visible.

Questions

Limited by Guarantee Formation: your questions answered

What is a company limited by guarantee?

A private company with members rather than shareholders. Each member guarantees to contribute a nominal sum, usually £1, if the company is wound up, and that is the limit of their liability. There is no share capital and no dividends, which is why the form suits clubs, charities and other not-for-profits that need a legal entity without owners.

What does it cost in total?

Our formation fee is £49 plus the Companies House incorporation fee of £100, passed on at cost, so £149 in total for a formation with model articles. Bespoke objects drafted are £99, formation with HMRC registrations £119, and the £199 bundle includes the first confirmation statement and first accounts.

Do I need bespoke articles?

The model articles for guarantee companies work for a simple club. If you intend to apply for charity status, need an asset lock, want specific membership classes or voting rules, or a funder requires particular clauses, you need bespoke articles. The £99 package drafts objects and the clauses you need; we tell you honestly which you require.

Is a guarantee company the same as a charity?

No. A guarantee company is a legal form; a charity is a status granted by the Charity Commission, OSCR or the Charity Commission for Northern Ireland. Many charities are guarantee companies, but a guarantee company can also be a non-charitable club or social enterprise. If you plan to register as a charity, the articles must meet the regulator's requirements, and we draft them accordingly.

Should we consider a charitable incorporated organisation instead?

A CIO registers only with the charity regulator, not Companies House, which halves the filing. It suits organisations that will definitely be charities and do not need to be on the companies register for borrowing or contracts. We explain the trade-off; if a CIO fits better we say so, though we do not form CIOs ourselves.

Who are the members and do they need to verify identity?

Members are the guarantors, often the committee or a wider membership. Directors run the company and since November 2025 must verify their identity with Companies House. Members who are also people with significant control, usually those with over 25% of voting rights, must verify too. We identify who falls where before filing.

Does a guarantee company pay Corporation Tax?

Yes, in principle, on any trading profits and investment income, unless it is a registered charity with the relevant exemptions or qualifies as a mutual trading or members' club with specific reliefs. Many small clubs have no taxable income. We register with HMRC and advise on the position; HMRC can agree that a dormant or non-trading company need not file returns.

What are the filing requirements?

The same as any company: a confirmation statement each year with the £50 Companies House fee, annual accounts nine months after the year end, and a Corporation Tax return unless HMRC has agreed otherwise. Charities also report to their regulator. Our £199 bundle covers the first year; our dormant and limited company accounts services cover subsequent years.

What is an asset lock and do we need one?

A clause preventing the company's assets from being distributed to members and requiring them to go to a similar body on winding up. Grant funders and charity regulators frequently require it; community interest companies have a statutory one. We include it in bespoke articles where your funding or status requires it.

Can a guarantee company have employees and trade?

Yes. It can employ staff, run a bar or shop, charge membership fees and sell services. The restriction is on distributing profit to members, not on making it. Trading profits may be taxable unless an exemption applies, and VAT registration is needed if taxable turnover exceeds £90,000.

How long does incorporation take?

Companies House usually approves online incorporations within 24 hours. Bespoke articles add a few days for drafting and your approval. If the name includes sensitive words such as "charity", "association" or "foundation", Companies House may require supporting evidence, which can add time. We check this at the start.

Can we convert our existing unincorporated club into a guarantee company?

Yes. The new company is formed, assets and contracts are transferred from the old association to it, and the old body is dissolved under its own rules. Leases, bank accounts and league registrations need updating. We form the company and provide a checklist for the transfer; legal advice on the lease assignment may be needed.

Where

A national service

Limited by Guarantee Formation is a Companies House or HMRC filing that works identically wherever your business is based, so it has one page for the whole United Kingdom rather than a page for each town. The process, the fee and the turnaround are the same for a company in Belfast, Glasgow, Cardiff or London. England, Scotland, Wales, Northern Ireland: all covered.

Related

Other services in company formation & filings

Get limited by guarantee formation for a fixed fee

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