NKF 2 - Type of company

The NKF saga was also interesting in that the type of company involved was not a normal company limited by shares, a class to which perhaps 99% of Singapore companies belong. Rather, it was a company limited by guarantee. In this type of company, members have their liability limited to the amount stated in the company's Memorandum of Association.

This type of company is often used for non-profit groups such as churches, charities like the NKF, cultural and sometime political associations. It is thought that instead of registering as a society which these groups can also do, forming a company limited by guarantee is easier procedurally and less subject to bureaucratic red tape when the constitution of the organisation is altered.