Q&As

Do directors of a company limited by guarantee and having a share capital require the shareholders’ consent to wind up the company?

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Produced in partnership with Steven Papadopoulos
Published on LexisPSL on 23/10/2019

The following Corporate Q&A produced in partnership with Steven Papadopoulos provides comprehensive and up to date legal information covering:

  • Do directors of a company limited by guarantee and having a share capital require the shareholders’ consent to wind up the company?
  • What is a company limited by guarantee?
  • What is a winding up?
  • What are the forms of winding up?
  • Do directors require shareholder consent?

Do directors of a company limited by guarantee and having a share capital require the shareholders’ consent to wind up the company?

It is assumed for the purposes of this Q&A that the company in question is a pre-22 December 1980 company, as since that date it has not been possible to form a company limited by guarantee with a share capital. It is also assumed that the entity is not a charity nor subject to special provisions by virtue of being regulated by a regulatory authority.

What is a company limited by guarantee?

A company limited by guarantee is a type of company whose members have undertaken to contribute to the assets of the company in the event of it being wound up. It is not possible for a company limited by guarantee to be a public company.

Since 22 December 1980 it has not been possible to form a company limited by guarantee with a share capital. However, before that date it was possible to incorporate a company with a share capital but for the limit of its members liability to be achieved by means of the guarantee in the memorandum of association.

A member of a company limited by guarantee but with a share capital has two different and distinct liabilities: the first is to pay the sum due on their shares, and the second is

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