Company Limited by Guarantee set-up with RAK ICC

A Company Limited by Guarantee (CLG) could be set up with RAK ICC as a company authorised to issue shares or as a company not authorised to issue shares. The name of a limited company shall end with the word “Limited” or “Incorporated” or the abbreviation “Ltd” or “Inc”.

In the case of a Company Limited by Guarantee, whether or not authorised to issue shares, at least one of the members of the company shall be a guarantee member and where the company is authorised to issue shares, a guarantee member may also be a shareholder. The guarantors give an undertaking to contribute a nominal amount in the event of winding up of the company.

The liability of a guarantee member to the company, as a guarantee member, is limited to

The liability of a guarantee member to the company, as a guarantee member, is limited to

the amount that the guarantee member is liable to contribute as specified in the memorandum and articles of association

any other liability expressly provided for in the memorandum or articles of the company

In the event of winding up of a Company Limited by Guarantee, any former guarantee member who was a guarantee member in the period of one year prior to the commencement of the winding up shall be liable to contribute an amount not exceeding the amount guaranteed by such person to the assets of the company for the payment of its debts and liabilities. They are also liable for the expenses of winding up, and for the adjustment of the contributions of that company’s guarantee members and former guarantee members that such former guarantee member would have been liable to contribute had the winding up occurred on the last day of their membership of the company.

Company Limited by Guarantee

Setting up a Company Limited by Guarantee (CLG) with RAK ICC (Ras Al Khaimah International Corporate Centre) offers a unique legal structure suitable for non-profit organizations, charities, and associations. Here are key points to consider when establishing a CLG with RAK ICC

Authorization to Issue Shares

A CLG can be set up either as a company authorized to issue shares or as a company not authorized to issue shares.

The name of the limited company must end with specific designations, such as “Limited,” “Incorporated,” or the abbreviations “Ltd” or “Inc,” regardless of whether it is authorized to issue shares.

Winding Up

In the event of winding up, former guarantee members who were guarantee members in the one-year period before the commencement of winding up are liable to contribute an amount not exceeding the guaranteed amount to the company’s assets for the payment of debts and liabilities.

Former guarantee members are also liable for winding-up expenses and the adjustment of contributions that they would have been liable for had the winding up occurred on the last day of their membership.

Guarantee Members

In the case of a CLG, at least one of the members must be a guarantee member. In situations where the company is authorized to issue shares, a guarantee member can also be a shareholder.

Guarantee members commit to contributing a nominal amount in the event of the company’s winding up.

Memorandum and Articles of Association

The specific obligations and liabilities of guarantee members, as well as the details of the guarantee, are outlined in the memorandum and articles of association. These documents form the legal foundation for the CLG’s operations.

Liability of Guarantee Members

The liability of a guarantee member is limited to the amount specified in the memorandum and articles of association.

Additional liabilities may be expressly provided for in the memorandum or articles of the company.

Non-Profit Focus

CLGs are commonly chosen for non-profit entities, charities, and associations. The structure allows organizations to operate with a focus on a specific purpose or cause, and any surplus funds are typically reinvested in the organization’s objectives.

Establishing a Company Limited by Guarantee with RAK ICC provides a flexible and internationally recognized framework for organizations that prioritize a non-profit model. It allows for legal separation, limited liability for guarantee members, and a commitment to a specific cause or mission. Legal advice and thorough understanding of RAK ICC regulations are crucial when setting up such entities to ensure compliance with applicable laws and regulations.

Features of a Company Limited by Guarantee

A Company Limited by Guarantee (CLG) is a distinct legal structure primarily used by non-profit organizations, charities, clubs, and associations. Here are the key features of a Company Limited by Guarantee

Overall, a Company Limited by Guarantee provides a legally recognized framework for organizations with non-profit objectives to operate effectively while offering limited liability protection to its members.

Possible uses of a Company Limited by Guarantee

A Company Limited by Guarantee (CLG) is a versatile legal structure primarily used by non-profit organizations, clubs, associations, and charitable entities. Here are some possible uses of a CLG

In summary, a Company Limited by Guarantee offers a flexible and legally recognized framework for a wide range of non-profit and community-oriented endeavors. Its use extends across various sectors and industries, providing organizations with the structure, governance, and limited liability protection necessary to pursue their missions effectively.