top of page
Formation Friend Logo

What company type?

1

Limited Company by Shares

  • A private limited company is a separate legal entity from its owners (shareholders).

  • Shareholders have limited liability, protecting their personal assets.

  • The company's finances are separate from the owners' finances.

  • Commonly used for small to medium-sized businesses.

2

Limited Company by Guarantee

  • Commonly used by non-profit organisations, charities, and clubs.

  • Instead of share capital, it has members who guarantee to pay a nominal amount in case of winding up.

  • Members have limited liability up to the amount guaranteed.

3

Charitable Incorporated Organisation (CIO - Charity)

  • A CIO is a popular choice for small to medium-sized charities.

  • It provides limited liability to its trustees and is a distinct legal entity.

  • CIOs have charitable status and can enter into contracts and own property in their own name.

4

Community Interest Company (CIC - Social Enterprise)

  • While not exclusively a charity structure, CICs are designed for organisations with a social purpose.

  • They can be limited by shares or by guarantee.

  • CICs have an "asset lock," meaning that their assets must be used for the benefit of the community.

5

To consider for a business

  • The choice of company type depends on factors such as business size, ownership structure, liability concerns, long-term goals and purpose.

6

To consider for a charity

  • Charities in England and Wales report to the Charity Commission. 

  • Carefully consider the structure that best suits the organisation's mission and goals while ensuring compliance with legal and regulatory obligations.

bottom of page