Guarantee Company


Guarantee Company is a sub-classification of Private and Public Companies. Usually, it does not have share capital; instead, it has members who act as guarantors.

The guarantors give an undertaking to contribute a nominal amount (typically very small) in the event of the winding up of the company. This type of company may also have capital; in such a case, members are liable to pay the capital amount as well as the guarantee amount.

Usually, these companies are formed for clubs and associations wherein members do not have the objective of generating profits.