A Common Question: Is Your Organization an NGO or a Company?

• 25 February 2025

A Common Question: Is Your Organization an NGO or a Company?

A recent query arose—"Your organization is not an NGO but a company!" This is a question many NGOs structured as Companies Limited by Guarantee (CLG) face. The confusion arises because a CLG is legally classified as a company, yet it functions as a non-profit organization. So, what is the real difference? Let’s break it down.

What is a Company Limited by Guarantee (CLG)?

A Company Limited by Guarantee (CLG) is a legal structure designed for non-profit organizations, where members do not own shares but instead commit to contributing a nominal amount if the organization is wound up. Unlike traditional businesses, CLGs do not distribute profits to members—instead, all funds are reinvested into the organization’s mission.

How CLGs Differ from Companies Limited by Shares (CLS)?

Are CLGs Considered NGOs in Mauritius?

Yes! Many NGOs in Mauritius are structured as Companies Limited by Guarantee because this legal form provides credibility, transparency, and accountability. While they are legally categorized as companies, they are fundamentally non-profit organizations working for social or environmental causes.

Why Do NGOs and NPOs in Mauritius Choose CLG Status?

Mauritius has a thriving non-profit sector, with thousands of registered NGOs working in education, environmental conservation, social welfare, and human rights. Many of these organizations choose CLG status because:

✅ Legal Recognition & Credibility – CLGs are recognized under Mauritian law, ensuring trust from donors, government agencies, and the public.
✅ Limited Liability for Members – Members’ liability is restricted to their guaranteed amount, protecting personal assets.
✅ Non-Profit Status – All funds must be used to fulfill the organization’s purpose, ensuring long-term sustainability.
✅ Tax Benefits & Charitable Status – CLGs can apply for charitable institution status from the Mauritius Revenue Authority (MRA) for tax exemptions and funding opportunities.
✅ Access to Funding & Grants – Many international donors prefer legally structured, well-governed organizations like CLGs.

Legal Framework & Registration in Mauritius

Companies Limited by Guarantee in Mauritius are governed by the Companies Act 2001. To operate legally, an organization must:

• Register as a Company Limited by Guarantee with the Registrar of Companies.

• Draft a constitution outlining its mission, governance structure, and membership obligations.

• Maintain financial records and comply with reporting obligations to ensure transparency and accountability.

Additionally, organizations seeking charitable status must meet MRA requirements to qualify for tax exemptions and other benefits.

Examples of CLGs in Mauritius

Some well-known NGOs and NPOs in Mauritius structured as CLGs include:

• Tanzidev – An NGO leveraging technology to accelerate positive impact in society by building ventures like anAngel and Impactors, connecting people, and driving social and environmental change.

• Sustainable Green Building Council Mauritius (GBCM) – Advocates for sustainable construction, eco-friendly building solutions, and a net-zero roadmap to reduce carbon footprints in the built environment.

• Mauritian Wildlife Foundation (MWF) – Dedicated to conserving endemic species and restoring natural ecosystems in Mauritius and Rodrigues.

• Eco-Sud – A grassroots environmental NGO actively working on marine conservation, community engagement, and sustainable development projects.

• LEAD (Leadership, Empowerment, Action & Development) – Works towards youth empowerment, sustainable development, and education programs across Mauritius.

These organizations benefit from the CLG model to ensure transparency, secure funding, and drive meaningful change.

Final Thoughts: Should Your NGO Be a CLG?

If you are part of an NGO or looking to start one in Mauritius, you might be wondering: Is a Company Limited by Guarantee the right choice?

For organizations that prioritize mission over profit, need strong legal recognition, and aim to attract sustainable funding, the CLG model is a powerful option.

However, NGOs considering this model must be prepared for higher compliance requirements and a lack of direct financial benefits for members. Despite these challenges, choosing a CLG structure ensures credibility, financial security, and long-term sustainability, allowing organizations to focus on what truly matters—creating a better future for Mauritius and beyond.