While both company types have been developed for use by not-for-profit entities, there are some distinct differences.
The NFP Pty Ltd Company is a type of private company mainly used to act as the trustee of either a public or private ancillary fund. Not-for-Profit Pty Ltd is a proprietary company limited by shares. Its funding generally comes from shareholders in the form of share capital and less so from the public. As it is registered as an ASIC special purpose company, its assets cannot be distributed to its shareholders at any time.
Public companies limited by guarantee have been developed for use as a not-for-profit organisation usually seeking charity status. This product establishes a public company that is limited by guarantee meaning it does not have share capital. Instead, its funding mainly comes from the public. The liability of members is limited by the members guarantee which is the nominal amount the member agrees to pay in the event that the company is wound up. CLGs are not permitted to make distributions of profits or assets to its members. CLGs can be considered as a Special Purpose Public Company Limited by Guarantee if it meets some ASIC’s requirements.
Patricia Holdings provides both of these company types with suitable constitutions for each structure. Contact our friendly team today.
