A Company Limited by Guarantee with a Share Capital, often known as a ‘hybrid’ company, is limited both by shares and by guarantee and has two classes of member – shareholders and guarantee members. Typically, the company will be structured so that the shares are issued on terms that each carries one vote but has no rights to dividends or to participate in the capital or income of the company in any other way. The Guarantee Memberships, on the other hand, will be issued on terms that they carry no voting rights but carry all the rights to participate in the income and capital of the company. As a result, all control rests with the shareholders while all benefits flow to the Guarantee Members. Hybrid companies are often used as ‘quasi-trust’ structures, particularly by residents of civil law countries where trusts are not recognised. The shares can be issued to professional managers, who act as quasi-trustees, but unlike normal shareholders they cannot receive financial benefit from holding the shares. All the financial benefits flow to the Guarantee Members.

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