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Features of a Company Limited by Guarantee Formati
Features of a Company Limited by Guarantee Formati
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Guest
Guest
Jul 01, 2025
4:01 AM
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A Company Limited by Guarantee Formation in Singapore is a popular business structure, especially for non-profit organizations, charities, clubs, and professional associations. Unlike companies limited by shares, a CLG does not have shareholders or share capital. Instead, it has members who act as guarantors. These members agree to contribute a predetermined amount, usually a nominal sum, if the company is wound up. This limits the members’ financial liability to the amount they have guaranteed, protecting their personal assets.
One key feature of a CLG is that it has a separate legal identity from its members. This means the company can enter into contracts, own property, and sue or be sued in its own name. This legal separation helps establish credibility and accountability, important for organizations focused on social or community objectives.
CLGs are governed by the Singapore Companies Act and must comply with statutory obligations such as filing annual returns and maintaining proper accounting records. They are prohibited from distributing profits to members, reinforcing their non-profit purpose. This makes CLGs ideal for organizations that reinvest surplus funds into their core mission rather than distributing dividends.
Overall, Company Limited by Guarantee Formation in Singapore offers a flexible, secure, and reputable framework for groups dedicated to charitable, educational, or social causes.
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