Articles of association: private company limited by guarantee

About this document

This set of articles is appropriate for any new or existing company limited by guarantee.

The limited liability by guarantee framework is usually used by non-profit or charitable organisations who wish their members to have an interest in the company for reasons other than financial ones. In many cases funding bodies require your organisation to use this structure in order to lend or donate to you.

Like a private company that has shares, this structure also protects the members from personal liability of the actions of the company and its officials.

This document is suitable for any size of organisation. The members may be few or may be numbered in thousands. As a result, you can use this articles template to enable your small organisation to expand without restriction.

The framework provided here is of course based on the model version provided in the Companies Act 2006. That act freed us from the longstanding straightjacket of a document few people dared to edit.

Because you can now edit your articles more flexibly, you set out how your company operates precisely in words that all stakeholders can understand. The so called model version will not suit you. There are many additions and omissions that are unworkable or impractical in the real world.

We have taken advantage of the new flexibility to give you a template set which is simple and effective - and in plain English of course. So whether you are starting a new company or considering a change to how decisions are made, this document should suit you well.

These articles are for a private company with a simple structure. We believe that it is more flexible and efficient if they are drawn to reflect just one class of members, all being equal. Because it is easier and less disruptive to change a committee than to change this document, we have provided a democratic structure - the members elect the board and have the right to remove them.

It is also suitable for a company where several members are directors.

As with all Net Lawman documents, the drafting notes give you comments and suggestions on every paragraph, explaining what to edit and how.

This document:

• is suitable for incorporating a new company or for changing an existing company
• is specific for a limited company by guarantee
• is not specific to any particular industry
• contains modern provisions in plain English
• allows you to construct each article to suit your exact needs
• is full of practical and commercial help and suggestions
• includes draft minutes of directors' and members' general meeting to change the articles

Alternative versions

We offer other variations for company structures. In particular, our vanilla set for a private limited company with shares is suitable for most trading companies.