Companies limited by Guarantee

[Roger de Coverly]

A question for all those lawyers and accountants.

In a Company limited by Guarantee, are voting rights in any way connected to Guarantors?

So hypothetically both individuals and organisations can become "members" of this CLG but only organisations are asked to sign forms making them guarantors. Can voting rights including the appointment and dismissal of directors be extended to individuals or even be exclusive to individuals if the Articles and Constitution are suitably worded?

[Michael Flatt]

Roger, you need to read the Memorandum and Articles of Association.

I believe that the signing of the white form was considered an unnecessary administrative exercise. On becoming a member your liability, should the company fail, is limited to a notional £1.

5. The liability of the members is limited.

6. Every member of the Company undertakes to contribute such amount as may be required
not exceeding £1 to the Company's assets if it should be wound up while he is a member,
or within one year after he ceases to be a member for payment of the Company's debts
and liabilities contracted before he ceases to be a member, and of the costs, charges and
expenses of winding up, and for the adjustment of the rights of the contributories among
themselves.

Reference
1. http://www.englishchess.org.uk/wp-conte ... l-2014.pdf

[Michael Flatt]

Deleted. Accidentally duplicated.

[Roger de Coverly]

Roger, you need to read the Memorandum and Articles of Association.

This isn't directly an ECF question. I'm asking for examples of organisations set up as CLGs which combine allowing every person to have a vote with not requiring every person to sign a Guarantor Form.

[Simon Brown]

Roger

Generally, voting rights are vested in the members unless the Articles say otherwise. I have no idea what the ECF Articles say. The £1 guarantee appeared to confer no rights but essentially removed the major benefit of being a CLG.

[Roger de Coverly]

Generally, voting rights are vested in the members unless the Articles say otherwise. I have no idea what the ECF Articles say.

In essence they define three classes.

Members with AGM votes
Members without AGM votes who have the right to elect representatives to attend AGMs
Members who aren't members.

The first two were expected to fill in the white form as Guarantors, but was this really necessary and essential or a misinterpretation by those who drafted the Articles back in 2005?

In practice the third category have been included with the second in the rare event that an election of Representatives takes place.