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In the case of companies described as a "Private company limited by guarantee without share capital", I understand that all Members of the company act as guarantors. In the case of it winding up, their liability is limited by the articles to a nominal fee (£1).

I understand that in a company limited by shares, there is no automatic prohibition on minors being shareholders, but they may not be bound contractually in some ways.

What happens in the case of a company limited by guarantee? Can a minor enter into a contract of guarantee in this case, and be held to paying £1 on the dissolution of the company? If not, does that mean minors cannot be Members of the company?

I can't seem to find anything relevant in the Companies Act 2006 - any sources for relevant information would be appreciated.

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    If a minor enters a contract, they or their guardians can void the contract any time until a short time after they are of full age. I don't know if they can become guarantors, but if they do, it's not much of a guarantee since they can void it.
    – gnasher729
    Jun 21, 2020 at 11:09
  • That was also my understanding - but does that mean that they can be Members of the company, with the only repercussion that their guarantee may be invalid if the company winds up?
    – Riot
    Jun 22, 2020 at 12:19

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There is no statutory provision prohibiting a minor from being a subscriber of a company limited by guarantee. It is possible that the company's articles of association prohibit minors from becoming subscribers.

I am unable to locate any case law on the matter either. Therefore, as long as there's no contractual bar to becoming a subscriber (through the articles of association), I see no reason why a minor cannot subscribe to a company and offer a guarantee.

It will, of course, be voidable at their own discretion until they turn 18, but that is a risk the company will be taking.

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Generally speaking, one must be legally of age to enter into a binding contract, and generally also to own titled property, unless a conservator has been appointed for them, or the property is held by some other fiduciary (e.g. a trustee or custodian) on their behalf.

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  • I was under the impression that minors could enter into contracts, but those contracts were voidable? I don't think property comes into this discussion as they are not shareholders but potentially guarantors - correct me if I'm wrong?
    – Riot
    Jun 24, 2020 at 13:25
  • @Riot A voidable guarantee is pretty much meaningless. Any time it was called it would be voided.
    – ohwilleke
    Jun 24, 2020 at 21:47
  • Of course. In this case it could only be called in the case of dissolution of the company - but does that in any way preclude the minor being given status of "member" in the company?
    – Riot
    Jun 26, 2020 at 13:08
  • @Riot Probably.
    – ohwilleke
    Jul 2, 2020 at 4:09

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