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Companies Limited by Guarantee
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Not-for-profit, religious and charitable organisations usually set up public companies limited by guarantee. There is no share capital. When the company is wound up, each member pays a nominal fee that could be as little as S$1. |
The liability of members is limited to such amount as they undertake to contribute to the assets on winding-up. That amount is specified in its memorandum of association, which forms part of a company's constitution. If the company is wound-up, each person who is a member at that time or has been a member within one year of winding up may be required to contribute up to the amount of his guarantee towards payment of the debts incurred while he was a member. Past members are liable only if the present members default. Such companies are invariably non-profit-making concerns. They include professional bodies, trade societies, clubs etc.
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