Compony law

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Sanjay Agarwal (Querist)
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17 September 2011 Dear all,
I want to know that what is the mean of limited by share and limited by guarantee please also give a specific example of that query...........

Thanks in advance.........

Hari Beldona

Hari Beldona (Expert)
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17 September 2011 Company Limited by Guarantee:
It is mainly used when setting up a non-profit business. Instead of having shareholders, this company has members. The company is formed for the sole purpose of providing a service to the public.

Company Limited by Shares:
A company limited by shares is an ordinary business in which the owners want to make a profit. Therefore there are shareholders and the clauses in their guiding statements that give them the liberty to engage in all kinds of activities that let them make a profit provided that these activities are legal.

1. Companies limited by shares are the most popular form of business.
2. Companies limited by guarantee are non-profit organizations, but companies limited by shares are those designed to make a profit.
2. Companies limited by guarantee have members and companies limited by shares have shareholders.
4. Companies limited by guarantee so not have share capital and have regulations that require them to show donors how they plan to use the money that they raise.