Buy a Company Limited by Guarantee

Phibsboro7

Buy a Company Limited by Guarantee

Hi Does anyone know if a company limited by Guarantee can buy or merge with another company limited by Guarantee. Or would we have to windup one of the companies and have the other company buy its assets.



Its so much simpler when you can just issue shares!

Freepass

It really depends on what is stated in your memorandum and articles of association. Usually there is a clause which allows you to gift any assets and/or funds to a similar company i.e. company limited by guarantee and then once the first company has no assets or liabilities it can apply for voluntary strike off (VSO)... VSO is a lot cheaper than liquidation...

PM me if you would like help with reviewing your Memorandum and Articles of Association.

Alan Shore

I'd agree, don't think that you could buy the company and turn it into a subsidiary and I recently discovered its not possible to merge then into one.

So it's probably a matter of transferring the assets of one into the other.

antoinolachtnai

I think you could in principal merge the companies by changing the memorandum and articles of both companies to allow this to happen.

Distributing the assets may have tax implications, or it may not. It really depends.

If there are no politics at play, it is really a matter of economics. The tax issue may not be significant for various reasons. But if it is, then it might be worth finding a legal solution to merging the entities.

Freepass

You can't merge the companies as there are no shareholders only members.. Do the companies have charitable status with the Revenue Commissioners??

antoinolachtnai

Well, you don't necessarily need shareholders to merge two entities. It is a legal question.

The charitable status makes a difference for the tax situation for sure. If it has charitable status, you will probably need permission for the merger or liquidation of assets.