Singapore Public Company Limited By Guarantee


A public company limited by guarantee is most often formed by non-profit organisations such as sports clubs, workers’ co-operatives and membership organisations, whose owners wish to have the benefit of limited financial liability.
A public company limited by guarantee does not have any shares or shareholders (like the more common limited by shares structure) but is owned by guarantors who agree to pay a pre-defined amount of money towards company debts.
Generally, the guarantors will have no profits distribution as they will instead be re-invested to help promote the non-profit objectives of the public company limited by guarantee. If any profits are distributed to the owners, then the company will forfeit its right to apply for a charitable status.


  • A public company limited by guarantee is a distinct legal entity from its owners, and is responsible for its own debts.
  • A public company limited by guarantee enjoys the same rights that a private limited company may have in accordance with the Companies Act, Cap 50.
  • It does not have a share capital.
  • It has members who will undertake to contribute a minimum amount of S$1.00 to the liabilities of the Company in the event the Company is wound up.
  • The personal finances of the company’s guarantors are protected. They will only be responsible for paying company debts up to the amount of their guarantees.
  • The status of ‘Limited’ will help to build the trust and confidence amongst clients and investors. This type of professional credibility is valuable and can help a company achieve its objectives more effectively.


  • At least 1 director who is ordinarily resident in Singapore
  • At least 1 member
  • Qualified Company Secretary
  • Constitution (formerly known as Memorandum & Articles of Association) setting out the objects and by-laws.
  • Submission of audited financial statements annually is mandatory unless it is dormant.
  • To hold Annual General Meetings (AGM).
  • To file Annual Returns with the Accounting and Corporate Regulatory Authority of Singapore (ACRA).
  • To file only PDF copy of the Financial Statements (FS) authorised by directors.

Advantages / Pros:

  • Exempt from corporate income tax if surplus funds are from members’ contributions.
  • Can apply to be registered as a charitable organisation or institute of public character in Singapore.

Disadvantages / Cons:

  • Subject to more annual disclosure obligations.
  • Requirements of reporting in accordance with law.
  • Professional assistance is required for setting up / incorporation.
  • Professional service provider’s assistance is required for regular or ongoing statutory compliance.


Some of the important FAQs about CLG

What is a Company Limited by Guarantee?

A CLG is used to carry out non-profit making activities like charity work.
Since CLGs are registered with the Accounting and Regulatory Authority of Singapore (ACRA) and governed by the Companies Act, it is usually set up by non-profit organisations requiring a corporate status. Additionally, CLGs may obtain charity status.

How do companies limited by guarantee differ from companies limited by shares?

CLGs do not have share capital unlike companies limited by shares. Thus, the liability of members of a CLG is limited to the amount which they undertake to contribute to the assets of the company in the event of winding up. This amount will be provided for in the company constitution.
On the other hand, for companies limited by shares, the liability of shareholders is limited to the portion of the company’s share capital that they have taken up.

Is a Company Limited by Guarantee a private Company or Public Company?

Company Limited by Guarantee is a public company. Only companies with share capital can be classified as private companies.

Is it ideal to set up my for-profit organisation as a company limited by guarantee?

As CLGs are prohibited from paying dividends and profits to its members, the structure is unsuitable for for-profit organisations where members typically wish a return on their investment through dividends.

Why a Company Limited by Guarantee is to be incorporated?

Some organisations may avoid incorporation to seek flexibility and lower cost. However, incorporation grants many benefits to the organisation.
Incorporation allows members to obtain limited liability. For example, upon incorporation, the CLG is considered to have a separate legal entity and distinct from its members. This means that a CLG may sue or be sued in its own name, and the members of the CLG will be protected from any liabilities incurred by the CLG.
Finally, incorporation offers tax benefits. In particular, a CLG that has been awarded charity status is exempt from tax. CLGs are liable to pay corporate tax at the prevailing corporate tax rate of 17% and can claim tax deductions.
As opposed to choosing other legal structures suitable for non-profits, e.g. society or charitable trust:
Besides incorporating a CLG, non-profit organisations may conduct their activities through structures like societies or charitable trusts. However, there are some critical differences between these structures.
While CLGs offer advantages like limited liability and tax benefits, it is important to consider the characteristics of your organisation to determine whether a CLG is the most suitable structure available for your organisation.
A society consists of 10 or more persons and is suitable for membership or volunteer-based groups that are small. Thus, a society is more suitable for small non-profit groups with few members. This allows the society to save the hassle of filing annual returns to ACRA, unlike a CLG.
A trust is typically set up by individuals who wish to leave aside some of their income for charitable purposes. However, the costs of establishing and managing trusts can be quite high.
Separate legal personality
Additionally, the society and trust are not treated as separate legal entities. Thus, unlike the CLG, the society and trust cannot sue or be sued. Instead, members will have to sue or be sued in their personal (individual’s) capacity.
Members of a society are also personally liable for all its losses, while trustees are responsible for all the trust’s losses. In contrast, CLGs are treated as separate legal entities and its members enjoy limited liability

How to Incorporate a Company Limited by Guarantee?

Legal requirements
A CLG needs to be set up by application to ACRA. To incorporate a CLG, the constitution must be prepared and submitted with the authority.
The constitution must include the name of the company and the amount each member has guaranteed to pay in the event of winding up. The objectives of the company must also be clearly stated.

What are the Regulatory Compliance Requirements for Companies Limited by Guarantee?

CLGs may have to apply for licences, depending on the type of activities it undertakes. This should be done at the time of registration with ACRA.

To what extent are Companies Limited by Guarantee subject to taxation and qualify for Tax Deductions/Exemptions?

Although CLGs qualify for corporate tax deductions and exemptions, the extent to which its income is taxable is determined by the type of income earned by a CLG.
If the CLG:

  • Carries on a trade or professional association; and
  • More than 50% of its receipts are from membership fees from Singapore members, where such receipts are tax-deductible under section 14 of the Income Tax Act, the company will be treated as conducting a business. This means that income from Singapore members and non-members will be subject to tax.
  • Where 50% or less of the receipts from Singapore members are tax-deductible under the Income Tax Act, only income from transactions with non-members are taxable.
Can a Company Limited by Guarantee apply for Charity Status?

A CLG may want to apply for charity status as it allows the CLG to obtain full tax exemption on its income.
To apply for charity status, CLGs have to fulfil the criteria set out by the Commissioner of Charities. Charities are allowed to carry on business activities, but the scope of such activities are limited.

What is the general perception of charities in Singapore?

In Singapore, charities are organisations which:

  • Operate on a not-for-profit basis;
  • Are set up exclusively for charitable purposes; and
  • Carry out activities to achieve those purposes which benefit the public.

Charitable purposes include:

  • Relief of poverty;
  • Advancement of education;
  • Advancement of religion; or
  • Other purposes beneficial to the community such as promotion of health and advancement of animal welfare.
What is the time frame and where to apply for charity status?

To apply for charity status, the organisation must apply within 3 months of its establishment to the Commissioner of Charities via the Charities Portal.
The organisation must prove to the Commissioner of Charities that:

  • Its purposes or objects are exclusively charitable;
  • It has at least 3 governing board members, of whom at least 2 must be Singaporean citizens or permanent residents; and
  • Its purposes or objects are wholly or substantially beneficial to the Singapore community.
Is there any option for dissolution of a Company Limited by Guarantee?

A CLG may be dissolved through various ways, including winding up and striking off.
Winding Up
Winding up occurs when the company is unable to pay its debts. The business is hence closed down and proceeds from the sale of assets are distributed among creditors. Winding up can occur either through involuntary winding up or voluntary winding up.
Striking Off
A director may apply to ACRA to strike off the company’s name from the registrar, for example, when the business has ceased or the CLG has been fully wound up.

What will happen to the CLG’s remaining funds/assets? Can they be distributed to members?

Any of the CLG’s remaining funds and/or assets after the winding up cannot be distributed to its members.
Instead, these will be distributed to organisations with similar objectives as the CLG, or to a registered charity as determined by the Commissioner of Charities.

What is to be considered while choosing the structure?

Non-profit organisations can be established using various structures. While a CLG offers advantages like limited liability and tax benefits, it is important to consider which legal structure best suits your organisation.

Is the Financial Statements (FS) of the CLG accessible to public?

Yes, since there is the requirement of filing of only the PDF copy of Financial Statements (FS) with ACRA, which is accessible for purchase under the Extracts by anyone.

Is the Annual Return (AR) of the CLG accessible to public?

Yes, the Annual Return (AR) lodgement is accessible for purchase under the Extracts with ACRA by anyone.

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