ACCA · Question 54 · Syllabus D: The formation and constitution of business organisations
Scenario: EcoHabitat, a group of environmentalists, wants to form a corporate entity to buy land for conservation. They want limited liability but do not intend to distribute profits. They are considering a company limited by guarantee. During the pre-incorporation phase, one of the founders, Leo, signed a contract for office space in the name of 'EcoHabitat Ltd'.
If EcoHabitat registers as a private company limited by guarantee, must it include 'Limited' or 'Ltd' in its name?
Answer options:
Yes, all private companies must use 'Limited' or 'Ltd' without exception.
No, it can apply for an exemption from using 'Limited' if its objects are the promotion of commerce, art, science, education, religion, charity or any profession, and its profits are applied to its objects.
No, companies limited by guarantee are never allowed to use 'Limited'.
Yes, but only if it intends to trade internationally.
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