Industry Companies Life

Limited by guarantee

In British and Irish company law, a private company limited by guarantee is an alternative type of corporation used primarily for non-profit organisations that require legal personality. A company limited by guarantee does not usually have a share capital or shareholders, but instead has members who act as guarantors. The guarantors give an undertaking to contribute a nominal amount (typically very small) in the event of the winding up of the company. It is often believed that such a company cannot distribute its profits to its members but (depending on the provisions of the articles) this is not actually true.[1] However, a company limited by guarantee that distributes its profits to members would not be eligible for charitable status.

Until 1981, it was possible in the United Kingdom to form a company limited by guarantee with a share capital.[2] Like a private company limited by shares, a company limited by guarantee must include the suffix "Limited" in its name, except in circumstances specifically excluded by law. One condition of this exclusion is that the company does not distribute profits. Common uses of companies limited by guarantee include clubs, membership organisations, including students' unions, residential property management companies, sports associations (such as the PGA European Tour), workers' co-operatives, other social enterprises, non-governmental organizations (NGOs) and charities (such as Oxfam). The railway infrastructure provider Network Rail, domain name registry Nominet UK, England and Wales Cricket Board and IXPs LINX (London Internet Exchange), and LONAP (London Access Point) are also companies limited by guarantee. Australia also has companies limited by guarantee, Cricket Australia being one example. When incorporating multi-stakeholder organisations, this form is sometimes preferred over the industrial and provident society because company law allows multiple classes of member with separate voting constituencies. Under section 5 of the Companies Act 2006, new companies cannot be formed as a company limited by guarantee with a share capital. The PGA European Tour is an organization which operates the three leading men's professional golf tours in Europe: the elite European Tour, the European Seniors Tour and the developmental Challenge Tour. Its headquarters are at Wentworth Club in Virginia Water, Surrey, England. The European Tour is the primary golf tour in Europe and is second to the United States-based PGA Tour in worldwide prestige. The European Tour was established by the British-based Professional Golfers' Association, and responsibility was transferred to an independent PGA European Tour organisation in 1984.[1] Most events on the PGA European Tour's three tours are held in Europe, but in recent years an increasing number have been held in other parts of the world outside of North America. The PGA European Tour is a golfer-controlled organisation whose primary purpose is to maximise the income of tournament golfers. It is a company limited by guarantee and is run by a professional staff but controlled by its playing members via a board of directors composed of 12 elected past and present tour players and a tournament committee of 14 current players. As of 2007, the chairman of the board is Neil Coles and the chairman of the tournament committee is Thomas Bjorn. The European-based events on the European Tour are nearly all played in Western Europe and the most lucrative of them take place in the United Kingdom, Ireland, Germany, France and Spain. The PGA European Tour also conducts the Ryder Cup Matches in cooperation with the PGA of America.

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