Definition of Public Company Limited by Guarantee? Meaning of Public Company Limited by Guarantee? What is Public Company Limited by Guarantee?

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.