In British and Irish company law , a company limited by guarantee LBG is an alternative type of corporation used primarily for non-profit organisations that require legal personality. A company limited by guarantee does not usually have a share capital or shareholders , but instead has members who act as guarantors.
Winding up a company that is Limited by Guarantee is relatively uncommon, simply because there are far fewer companies Limited by Guarantee, rather than having Ordinary Shareholders. The winding up of a company Limited by Guarantee is still guided by the Corporations Act.
Like any business, when a registered charity becomes insolvent, something has to be done. With commercial enterprises, there are formal creditor agreements and other rescue options that can be used to try and save them.
Companies limited by guarantee LBG are often non-profit organisations. Therefore, they are often converted to be a community interest company CIC to prevent extraction of profits.
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