In this type of company, the members’ responsibility and liability will only be limited to the amount of the guarantee, that is, to the amount that they have promised to contribute to the business should it be subject to a liquidation process.
Companies limited by guarantee thus differ from those limited by shares as in the latter, the shareholders’ liability is only limited to the amount unpaid on the shares that they hold and subject to the company’s constitution.
The procedure for setting up such a company is pretty much similar to that of the company limited by shares. The relevant application form and fees have to be paid to the Registrar of Companies, to the satisfaction of the Registrar and the applicable laws in Mauritius. Moreover, all the guarantors (who are referred to as members) have to sign a document to express their consent with respect to their names and other particulars being entered in the Register of Members and to the amount that they have agreed to contribute on the event of the company’s winding up.
Like a normal company limited by shares, this type of company will also be subject to tax applicable at 15% on corporate profits and to benefits arising from the DTAA network, except if it is incorporated as a GBC2. It will furthermore have to submit its reports to the MRA and the Registrar for taxation and inspection purposes, except yet again, if it has been set up as a GBC2.