14 Companies limited by guarantee

Companies limited by guarantee

  1. A company limited by guarantee is normally incorporated for non-profit making functions. The distinguishing feature of a company limited by guarantee is that the company has no share capital.
  2. A company limited by guarantee has members rather than shareholders. The members of the company guarantee or undertake to contribute a predetermined sum to the liabilities of the company which becomes due in the event of the company being wound up. The predetermined sum is normally RM1.
  3. A company limited by guarantee will normally include in its Memorandum a non-profit distribution clause.
  4. A company limited by guaranteed is usually formed by clubs, professional, trade or research associations.
  5. After the coming into operation of the Act, no company can become a company limited by guarantee with a share capital.
  6. Section 14A of the Act, states that on or after the coming into operation of the Act, no company may be formed as or become a company limited by guarantee with a share capital.

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