Conversion of company limited by shares to company limited by guarantee

Can company Limited by shares be re-registered? Can I change the limited liability of an existing company? Is a company limited by guarantee public? Who are the shareholders of limited by guarantee? There is no statutory procedure for re-registering a company limited by shares to a company limited by guarantee.

It is not possible to to convert the same corporate entity from one type of limited liability to the other. Company limited by guarantee to limited by shares. Unfortunately, you cannot change the limited liability of an existing company from guarantee to shares. This type of re-registration is only available for converting companies limited by shares to unlimited companies and vice versa, or private limited companies to public limited companies and vice versa. One of the issues is that a company name is usually selected after careful thought and consideration.

Assuming that the registrant still wishes to use it, they could not then incorporation another business with that name as it would be returned from Companies House as unavailable. The first incorrectly formed entity is already using it and the rules governing existing company names would apply. See full list on completeformations. Even if a second company incorporation was to be carried out using a different name, the original entity would still exist and be under the ownership of the registrant.

They would remain liable for the fulfilment if that entities statutory obligations which would accompany it. The preparation of yearly accounts, the annual return and so on will still be required for the first company. In addition, the registrant would have already incurred formation costs on a company which they can not use. On the basis that they required a trading entity, an entity limited by guarantee would be completely unsuitable for that purpose.

Changing the type of company is not a possibility as there is no mechanism by which the alteration from guarantee to shares can be carried out. The registrant has two options with regards to this situation: Option involves the dissolution of the company limited by guarantee and thereby releasing its name. Once the entity has been dissolve a new company of the correct type could then be incorporated using the newly available name. There are several disadvantages of choosing this metho namely: 1. Dissolving a limited companymight take as long as three months which would probably cause a significant delay in the planned business activities. Although perhaps a minor risk, there is no assurance that when the first company is dissolved another person would not then appear and register the name which the original registrant was keen to use.

The allocation of company names is carried out on a first come first served basis and there is no means of reservation without actual purchase. There is no provision for a company limited by shares to be re-registered as one limited by guarantee or for the reverse process , it would be necessary to register a new company of the required type and transfer the assets of the old company to the new one. You can only do this process once though.

And the company is treated as separate legal entity from its members. As far as legal definitions are concerned both the companies are one and the same. A guarantee is a fixed amount.

The company constitution typically details all guarantees. But, sub – rule (1) suggest any company other than not for profit company may convert into a company limited by shares. INC- in the manner provided in sub-rules (2) and (3) of Rule 37. Limited to Unlimite from Private to Public or from limited by shares to limited by guarantee or vice versa.

I am looking into re-registering a private company limited by guarantee as a private company limited by shares. I am a qualified corporate lawyer. A company that is limited by shares will divide the share capital into fixed amount shares that can then be issued to shareholders and subsequently become company owners.

The IBC Act provides that for such a company, the Memorandum of Association has to include therein the statements contained in sections (1) (f) and (1) (g). A company limited by shares can be financed using loans, equity, and grants. These companies could be limited by guarantee or shares. Companies limited by share are of two types – public companies and private companies.

While anybody can buy shares of a public company , who can be the members of a private company is defined by the law.