Set Up Company Limited by Guarantee (CLG)
We make it easy to establish a Company Limited By Guarantee (CLG) in Singapore. Registering a CLG allows you to separate your company’s liabilities. Let EBOS guide you through the process from start to finish!
Benefits of Setting up a CLG in Singapore
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FUNDRAISING BENEFITS
Securing grants can become more attainable. Numerous funders exclusively allocate grants to registered nonprofits, perceiving these organizations as more reliable and regulated. A CLG is not financed by shareholders. A CLG is dependent on contributions, grants, and gifts from its members in order to carry out its objectives. The organization is committed to carrying out philanthropic, educational, cultural, and other non-profit endeavors that enhance society.
ENHANCED CREDIBILITY
A Company Limited by Guarantee’s stakeholders are not regarded as shareholders and do not possess shares. Rather, they are employees of the business. Except in cases of fraud, members are shielded from financial risk and are not accountable for the debts of the firm. The non-profit status of the organization lends credibility to it, which can be helpful if you’re eager to promote the goals and standing of the business.
TAX EXEMPTION
In Singapore, the corporation tax rate is 17% on chargeable income. All profits you make from your company’s members are not subject to corporate income tax. Depending on the kind of income that the Company Limited by Guarantee earns, additional benefits may also be available such as a CLG may apply for charity status, which entitles it to total income tax exemption. The business must, however, satisfy the Commissioner of Charities’ (COC) requirements.
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WHAT is a company limited by guarentee (CLG)
Frequently Asked Questions
Are Companies Limited by Guarantee a Public or Private Organisation?
Since CLGs lack share capital, as opposed to businesses that are restricted by shares, CLGs are considered public companies. Members of a CLG are therefore only liable to the extent that they agree to contribute to the company’s assets in the event that it is wound up. The company constitution will include provisions for this sum.
In contrast, shareholders’ liability in a corporation limited by shares is capped to the amount of capital they have contributed to the company.
Are CLGs limited to only charities?
A CLG does not have to be a charity, but it can apply for charity status as it allows the CLG to obtain full tax exemption on its income.
In order to be eligible for charity status, CLGs must meet the requirements outlined by the Commissioner of Charities. Charities are permitted to do business, however the range of these operations is constrained.
Who owns a Company Limited by Guarantee?
Minors may join a Company Limited by Guarantee if the company’s charter permits it. Members of a company might be either individuals, corporations, or other legal entities.
What is the Corporate Structure of a Company Limited By Guarantee?
A company limited by guarantee operates substantially like a company limited by shares in many respects. They must adhere to many of the same rules, administrative obligations, and responsibilities. The Companies Acts govern both, and both have statutory filing requirements, such as producing annual accounts and confirmation statements, as well as the requirement to maintain a registered office address in the nation of formation.
Nevertheless, in contrast to a share company, a private limited company is run by members who act as guarantors and does not have any investors or share capital. A minimum of one director is required (two are required for charity organizations), who is also usually a guarantor.
What are the requirements for CLG?
- Operate as a nonprofit organization
- Founded exclusively with philanthropic intent
- Finish the tasks necessary to achieve its goals and benefit the general population.
what is the difference between company limited by shares and company limited by guarantee
The majority of limited firms have share limitations. This indicates that stockholders, who are endowed with specific rights, own them. For instance, shareholders’ votes may be required for directors to approve changes to the corporation.
Instead of shareholders and shares, companies limited by guarantee have guarantors and a “guaranteed amount.”
“Ordinary” shares are held by most companies. This implies that directors are entitled to dividend payments and one vote on corporate decisions per share.
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Corporate Secretarial Services
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