Incorporating Company Limited by Guarantee

A company limited by guarantee abbreviated as a CLG, is corporation used for non-profit functions or objectives.  

Section 7 of the Companies Act 2015 provides for company limited by guarantee if:

  • It does not have a share capital;
  • The liability of its members is limited by the company’s article to the amount that the members undertake, by those articles ,to contribute  to the assets of the company in the event of its liquidation; and
  • Its certificate of incorporation states that the company is limited by guarantee.

Usually, a company limited by guarantee does not have any shares to trade, it is instead owned by guarantors who endeavor to pay a certain amount of money to meet the debts of the company. The profits made are not distributed to the guarantors of the company but instead re-invested back to the business. In the event that the profits are distributed to the guarantors, the company will forfeit its rights of applying for a charitable status.

The directors and the members of a CLG must undergo vetting before the company is registered.

What are the Requirements for Registration?

For a person or group of individuals wishing to incorporate a CLG, they must lodge the following documents with the Registrar:

  1. Application and reservation of name.
  2. A duly filled Form CR1. This is an application form used to register a Limited company, Unlimited Company and a company limited by guarantee.
  3. Form CR3, which is a model memorandum for a company limited by guarantee.
  4. Articles of Association. These are only presented incase a company chooses to present its own articles instead of adopting those that are provided in the regulations.
  5. A copy of national I.D card, KRA PIN certificate and recent colored passport photo of the directors and the company secretary, if any.
  6. Form CR8, which is a notification of the directors’ residential address.
  7. A copy of the national I.D card of the person lodging the documents at the Registrar.

It is important to note that if the persons registering a limited liability company by guarantee wish to dispense with the word ‘LIMITED’ in the name of the company they can do so by making an application to the Registrar General at an additional fee.

For further inquiries, please get in touch.