Charity Articles of Association - Private Company Limited By Guarantee

These Charity Articles of Association - Private Company Limited By Guarantee are designed for charities that will be incorporated as a company under the Companies Acts, rather than set up in an unincorporated form.

They are intended for a charity that will be a company limited by guarantee. They take into account charity law requirements and, where appropriate, include provisions that appear in the Charity Commission’s model articles for a charitable company.

What does Charity Articles of Association - Private Company Limited By Guarantee do?

They set out the rules governing the internal affairs of the charity company, including governance and decision-making provisions appropriate for a charitable company limited by guarantee.

What does Charity Articles of Association - Private Company Limited By Guarantee cover?

• Provisions tailored for charities and charity law requirements.
• Provisions drawn from the Charity Commission’s model articles for a charitable company, where appropriate.
• A structure suitable for a company limited by guarantee, with members rather than shareholders and no share capital.

Specific guidance notes are included at the front of the document to assist in tailoring the articles. These guidance notes do not form part of the articles and should be removed before the articles are used.

When should you use Charity Articles of Association - Private Company Limited By Guarantee?

Setting up the charity as a company under the Companies Acts may be appropriate where, for example, the charity will:

• Be quite large.
• Have employees.
• Enter into commercial contracts, including contracts to deliver services.
• Raise finance.
• Own freehold or leasehold land or other property.

This structure may also be preferable for trustees because the company is liable for what the charity does, and trustees may have better protection from personal liability for the charity’s debts.

Where a charity is set up as a company under the Companies Acts, it should be set up as a company limited by guarantee rather than a private company limited by shares. A company limited by guarantee has members (who normally have equal voting rights and elect the directors or trustees) and any profits (often known as “surpluses”) are not distributed as dividends, but may be used to support the activities for which the charity is formed.

It is also possible for a charity to be set up as a Charity Incorporated Organisation (“CIO”) under charities legislation (not under the Companies Acts). However, most incorporated charities are set up as companies limited by guarantee.

Companies formed before 1 October 2009 / Background

Unless a company creates its own articles excluding or amending the model articles provided by the Companies Act 2006, the model articles for that company type apply by default. Companies are free to adopt, vary or exclude some or all of the model articles, subject to the Companies Act 2006.

Choose the right version

Use this document if you are setting up a charity as a private company limited by guarantee and you need charity-specific articles. If you are setting up a non-charitable company limited by guarantee, or a company limited by shares, use the relevant non-charity model articles instead.

• Articles of Association - Private Co Ltd by Guarantee
• Model Articles Of Association - Private Company Limited By Shares

Other Helpful resources

• Memorandum - Charity Company Limited By Guarantee – the memorandum used on incorporation for a charity company limited by guarantee.

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