In Irish company law, a company limited by guarantee is an alternative type of corporation used primarily for non-profit organisations that require legal personality. A guarantee company does not have a share capital but instead has members who act as guarantors instead of shareholders, as happens with other types of companies. The guarantors give an undertaking to contribute a nominal amount (€1 in the case of The Plaza) towards the winding up of the company in the event of a shortfall upon cessation of business. A company limited by guarantee that distributes its profits to members would not be eligible for charitable status. The Plaza Buncrana has charitable status and so cannot distribute profit to members.
Common uses of guarantee companies include clubs, membership organisations, including students' unions, sports associations (such as the PGA European Tour), workers' co-operatives, other social enterprises, non-governmental organizations (NGOs) and charities (such as Oxfam). The railway infrastructure provider Network Rail, domain name registry Nominet UK, England and Wales Cricket Board and IXP LINX (London Internet Exchange) are also companies limited by guarantee. Australia also has companies limited by guarantee, Cricket Australia being one example.
