Public Company Limited by Guarantee

What is a public company limited by guarantee?

A company limited by guarantee is a specialised form of public company designed for non-profit organisations. In Australia companies limited by guarantee are subject to the Corporations Act 2001 (Cth) and administered by the Australian Securities and Investments Commission (ASIC). Like incorporated associations, this legal structure designates an organisation as a separate legal entity. A company limited by guarantee can be sued, legally lease a property, enter into contracts or hold assets in its name. 

The term company limited by guarantee refers to what occurs in the winding up of this type of company. The members of a company limited by guarantee must specify the amount they are willing to contribute to the property of the company on its winding up and this will determine or limit the liability of the company’s members.

What are Public Company Limited by Guarantee structures used for?

This legal structure is generally used to be either:

• a charity registered with the Australian Charities and Not-for-profits Commission that is exempt from paying income tax; or
• a "not-for-profit" organisation that is not a charity but which can self-assess as exempt from paying income tax, such as sporting associations, religious organisations, or community and education services.

What are the minimum requirements of a Public Company Limited by Guarantee?

As a minimum, a company limited by guarantee must:

• have at least three directors and one secretary
• have at least one member
• be internally managed by a constitution or replaceable rules
• maintain a register of its members
• keep a record of all directors’ and members; meeting minutes and resolutions
• appoint a registered company auditor within one month of its registration
• hold an annual general meeting once every calendar year within five months after the end of its financial year
• receive and review an annual company statement and pay an annual review fee
• lodge notices whenever changes to its officeholders, office addresses, constitution and its name occur.