Company limited by guarantee
A company without share capital for associations, clubs and trade bodies, with members' liability capped at a guarantee.
Overview
A company limited by guarantee has members who promise to contribute a fixed amount if it is wound up, instead of buying shares. It suits trade bodies, clubs and associations.
Why it matters
Companies limited by guarantee are often used for associations, clubs and not-for-profit bodies. The members guarantee a fixed amount instead of buying shares, which suits organisations that do not distribute profits.
Who needs this
- Trade and professional associations
- Clubs and membership bodies
- Not-for-profit projects that don't need share capital
How it works
Who does each step, and how long it usually takes once documents are complete.
- 1Purpose and membersTAXWORK
Objects and guarantee amount agreed.
1–2 days - 2Memorandum of guaranteeTAXWORK
States the amount each member guarantees.
2–3 days - 3IncorporationTAXWORK
Filed with SECP; s.42 licence too if objects are charitable.
1 day - 4CertificateSECP
Company registered.
1–2 weeks, longer with a licence
Documents we need
Tick what you already have, then send the list to us.
Which company type fits you?
Under the Companies Act 2017 (sections 2(49), 14, 42, 154 and 247) and the LLP Act 2017.
| Type | Members | Directors | Liability | Auditor | Best for |
|---|---|---|---|---|---|
| Single member company | 1 | 1 + nominee | Limited by shares | CMA or CA if paid-up capital under Rs 3M | Solo founders |
| Private limited | 2 to 50 | 2 | Limited by shares | CMA or CA if paid-up capital under Rs 3M | Startups and family businesses |
| Public (unlisted) | 3 or more | 3 | Limited by shares | Chartered accountant | Raising capital from many investors |
| Listed company | 3 or more | 7 | Limited by shares | Chartered accountant | Public share trading on PSX |
| Limited by guarantee | Members | 2 or 3 | Up to the guarantee | As per company type | Associations and clubs |
| Section 42 NPO | 3 or more | As per type | Licensed, no profit distribution | Chartered accountant | Charities and foundations |
| LLP | 2 or more partners | Designated partners | Limited for partners | As required | Professional firms, joint ventures |
| Foreign branch / liaison | Foreign parent | Authorised person | Parent's liability | Chartered accountant | Foreign companies entering Pakistan |
What you receive
- Certificate of incorporation
- Memorandum stating the guarantee
Deadlines, risks and penalties
- Charitable or not-for-profit objects need a licence under s.42
Mistakes we fix, and what our fee covers
Common mistakes we fix
- Annual return (Form A / Form 29) filed late, which brings SECP penalties
- Change of directors, shares or address not reported to SECP
- Company NTN and tax return not filed even when there is no income
- Beneficial ownership register not kept up to date
Included in our fee
- Name check, documents and filings on SECP eServices
- Board and shareholder resolutions drafted for you
- Company NTN and FBR profile set up or updated
- A compliance calendar for the year ahead
Law and references
The sections and rules this service is based on.
- Companies Act 2017, s.14(2)(b), s.28 and s.45
- s.49 – conversion of a guarantee company
Questions
How long does it take?
About 2–4 weeks; longer if a s.42 licence is needed. Step by step: Purpose and members (1–2 days), Memorandum of guarantee (2–3 days), Incorporation (1 day), Certificate (1–2 weeks, longer with a licence).
What does it cost?
We give a fixed quote after reviewing your case. Government fees are extra where they apply.
What happens if I miss a deadline?
Charitable or not-for-profit objects need a licence under s.42.
Do members pay anything upfront?
Not under the guarantee; they're liable only up to the guaranteed amount on winding up.
Is it the same as an NPO?
Not always. A not-for-profit licence under Section 42 is a separate process, which we can handle together.
Does it need an audit?
Most guarantee companies need audited accounts. We coordinate this with partner firms.
Why clients choose TAXWORK
Individuals, businesses and companies across Pakistan and overseas.
Rawalpindi/Islamabad, Sialkot and Karachi (with Raza Siddiqui & Co., Chartered Accountants).
You get the scope and a fixed fee in writing before any work starts.
Progress updates, and a copy of everything we file or submit for you.
Keep reading
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View service →Ready to get company limited by guarantee done?
Send your documents on WhatsApp or book a meeting. A consultant confirms the scope and a fixed fee before any work starts.