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Home > Offshore Services > Offshore Company Formation > Types of Offshore Company > Guarantee & Hybrid Companies
Guarantee & Hybrid CompaniesThe form of company normally used for business activities is the company limited by shares, in which, once he has paid for his shares, the shareholder has no further liability for the debts of the company. It is however possible to form a company in which there are no shareholders. The funds which will be used in the business, may be provided by persons who purchase membership of the company, in much the same way as membership of a golf club may be purchased. If those members also undertake to make a contribution towards the debts in the event of an insolvent liquidation, their liability is limited to the amount of their guarantees. This may be as little as, say $10, and such a company is known as a guarantee company. Many golf clubs are in fact guarantee companies. It is also possible to form a company, which has both shareholders and guarantee members and the rights of each group may be different. One person may own the shares and another may be a guarantee member. Hence the name hybrid. This gives rise to opportunities for tax and estate planning. The guarantee or hybrid company often appeals, for this purpose, to residents of civil law countries, where the trust may not be fully understood, and to residents of countries having currency restrictions who may be barred from owning shares in foreign corporations. (See Typical uses of Offshore Companies).
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