A Company Limited by Guarantee is a legal structure commonly used by:
- charitable organisations that aim to be exempt from paying income tax.
- not-for-profit organisations that is not a charity but which can self-assess as exempt from paying income tax. Examples of relevant organisations include: a community service organisation, a sporting organisation, an educational institution, a religious organisation and recreational or sporting clubs, etc
CLG is a type of public company established "on the principle of having the liability of its members limited to the respective amounts that the members undertake to contribute to the property of the company if it is wound up" - Corporations Act 2001 (Cth). This contributed amount is outlined in the company’s constitution and is generally nominal. Due to limited by guarantee companies being public companies that are registered in accordance with the Corporations Act 2001 (Cth), they must comply with the sections of the Act that apply to them.
