LBG Company Formation

Please note the following:

• This product provides a “not-for-profit” LBG, not a registered charity or Charitable Incorporated Organisation (CIO)
• The company will have the suffix “LTD” or “Limited” in its name, indicating that it is a limited liability company, albeit limited by guarantee. Limited liability means that the members or subscribers cannot be liable for the debts of the company beyond the amount for which they give a guarantee.
• Companies Limited by Guarantee are liable to corporation tax on any profits or surpluses, even if they are run as “not-for-profit” organisations.
• The Articles of Association supplied by us, for this product, cannot be edited during the application. This product will also not allow the substitution of alternative Articles of Association.
• The Articles of Association are drafted for a small membership and suitable for up to 5 or 6 members. If your membership is larger, you should use our editable articles pack which allows you to supply your own or edit the articles we provide.
• Members do not have to be directors of a company and directors do not have to become members.

Articles of Association:

The articles of association are the written constitution of the company and set out how the company will be run. The Articles are agreed by the company’s founding members (alternatively known as guarantors or subscribers).The following sets out the key features of the Articles of Association we supply with this product:

• The liability of each member is capped at the amount stated in the articles and is usually £1, but can be anything the founders decide.
• Each member is liable for the amount stated during the time he or she is a member and for up to one year after membership ceases.
• Members are required to give 7 days notice to withdraw their membership
• Unlike shares held in a company,membership is not transferable
• Unlike shareholders in a company, each member only has 1 vote at company meetings.
• There is no restriction on directors remuneration (unlike a charity)

Annual Compliance Requirements:

• Like all companies registered with Companies House, your LBG will have to file yearly accounts made up to the accounting reference date.
• An annual confirmation statement is also required stating details of directors, members, PSCs and any changes to the total guaranteed. Companies House charge a filing fee of £13.
• You will be required to submit a Corporation tax return each year, even if no tax is payable.