Distinction between a company limited by shares and a company limited by guarantee.

Company limited by shares:

• This is a limited liability company.
• Limitation of liability by shares means that a member can only be called upon to contribute to the assets of the company the amount if any outstanding or unpaid on the shares held beyond which the member is not liable.

Company limited by guarantee:

• This is a limited liability company.
• Limitation of liability by guarantee means that a member can only be called upon to contribute to the assets of the company the amount he undertook to contribute if the company was would up during his membership or within one year of cessation of membership beyond which the member is not liable.