Co-operatives usually operate as limited companies and their members are therefore protected from financial risk as they have limited liability.
Many charities have liability limited by guarantee. This means that a few people have agreed to be members and guarantee the debts. These guarantees are usually very small - no more than ¬£10 a head. In this case, the business will be listed as ‘limited by guarantee’ - this term is a warning to other businesses that debts are unlikely to be paid if the charity fails. It is rare to find a company that is not a charity that is limited by guarantee.