What is Compny limited by gurarantee or a guarantee company?
A guarantee company is a company having the liability of its members limited by its memorandum of association to such an amount as the members may thereby undertake to contribute to the assets of the company in the event of its being wound up. Guarantee companeis are of two types, viz., guarantee company not having share capial and guarantee company having share capital. • Guarantee company not having share capital – A guaranatee company not having share capital does not obtains initial and working funds from its members, but from some other sources, such as grants, endowments, fees, subscriptions, etc. Institutions started by Government grants or donations from the public can be run by such companies. • Guarantee company having share capital – Where initial working capital is not available through grants, etc., but once the company is set in motion, the normal working funds would be available through fees, subscriptions, charges, etc., received from the services rendered, a guarantee
