What:
A private company limited by guarantee is a legal structure commonly used by charities in the United Kingdom, although it is also sometimes used by other membership organisations such as sports clubs. The main way it differs from regular company types is that it does not operate through share capital or shareholders. Instead, company members act as guarantors for the organisation. The role of guarantor means that if the organisation enters into liquidation, members will each contribute a small amount of money. The financial liability for members is set at this guarantee amount.
Organisations set up using this model often operate to meet not-for-profit goals. Profits are often reinvested back into the organisation to help meet its objectives. It does mean there are some limitations in how they can raise funds, as they cannot issue shares to investors. They can still receive bank loans and various forms of grants.
Examples:
There are some major UK organisations engaging in deep-tech that are private companies limited by guarantee. This includes the Alan Turing Institute, which is the UK’s national institute for data science and artificial intelligence and a registered charity. Another example is Satellite Applications Catapult, a technology and innovation centre that helps businesses turn satellite data and space technology into commercial products and services.
Considerations for deep tech:
- This structure aligns with mission-driven deep tech ventures, as profits are reinvested into meeting the organisation’s objectives.
- A potential deep tech venture developed through this structure would need to be aware that a private company limited by guarantee cannot issue shares or raise equity investment. They would therefore need to be prepared to seek alternative modes of financing, such as grants.
- There are benefits in terms of CLG’s lack of shareholders and the perceived neutrality that accompanies this structure. This could potentially be useful when seeking to build collaborations across academia, industry or government.
More info:
Association of Chartered Certified Accountants (ACCA) (2013) Companies limited by guarantee. Available at: https://www.accaglobal.com/uk/en/technical-activities/technical-resources-search/2013/february/companies-limited-guarantee.html (Accessed: 5 August 2026).
Companies Made Simple (2025) What is a company limited by guarantee? Available at: https://www.companiesmadesimple.com/blogs/limited-company/what-company-limited-guarantee (Accessed: 5 August 2026).
Tide (2024) What is a company limited by guarantee? Available at: https://www.tide.co/blog/company-formation/what-is-a-company-limited-by-guarantee/ (Accessed: 5 August 2026).