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Difference between company limited by shares and company limited by guarantee?
Wiki User
∙ 13y ago
A private limited company is an incorporated firm which offers limited liability to its shareholders but places certain restrictions on its ownership. These restrictions are meant to prevent any hostile takeover attempt. The major restriction are: (1) stockholders (shareholders) cannot sell or transfer their shares without offering them first to the other stockholders for purchase, (2) stockholders cannot offer their shares or debentures to the general public over a stock-exchange, (3) number of stockholders cannot exceed a fixed figure.
A company limited by guarantee, or guarantee company, lacks share capital and possesses liability limited to the individual involvement of each member participating in its operation. Guarantee companies generally comprise the category of non-for-profit companies or charities.
Wiki User
∙ 14y ago
Wiki User
∙ 13y agoThe main diffrerence between a company limited by guarantee and a company limited by shares is that the company has no share capital. A company limited by guarantee has members, rather than shareholders, the members of the company guarantee/undertake to contribute a predetermined sum to the liabilities of the company which becomes due in the event of the company going under.
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