Q&As

Is there any limitation on a charitable trust being a shareholder in an unlimited company?

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Published on LexisPSL on 10/03/2021

The following Private Client Q&A provides comprehensive and up to date legal information covering:

  • Is there any limitation on a charitable trust being a shareholder in an unlimited company?

Is there any limitation on a charitable trust being a shareholder in an unlimited company?

It has been assumed that the charity's constitutional documents do not prohibit investment by the trustees in an unlimited company.

An unlimited company is a private company whose members are not limited in their liability to contribute to the obligations of the company on winding up. An unlimited company cannot be a public company.

From the perspective of the unlimited company, there are no specific company law restrictions on who might be a member of the company. For further information, see Practice Note: Unlimited companies.

It appears that there are any specific prohibition under charity law on a charity holding shares in an unlimited company. However, the absence of a prohibition does not mean per se that it is a suitable investment. Trustees should consider whether such an investment is an appropriate exercise of their trustees' powers, set

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