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Legal structures: which one? Erica Crump Joanna Stokes.

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Presentation on theme: "Legal structures: which one? Erica Crump Joanna Stokes."— Presentation transcript:

1 Legal structures: which one? Erica Crump Joanna Stokes

2 Charitable Company Limited by Guarantee Key points: Established as a company limited by guarantee at Companies House (no shares, just members) Needs to have exclusively charitable purposes and be for the public benefit Then apply to the Charity Commission to become a registered charity Regulated by Companies House and the Charity Commission

3 Charitable Company Limited by Guarantee May be the right choice for you if: What you want to do falls within a charitable purpose and benefits the public You need charitable status to obtain funding It is important for you to be able to claim tax reliefs You want to raise money through donations from the public, and need a registered charity number May not be the right choice for you if: You want to be employed by the organisation and be a director You want to carry out extensive commercial activities or activities which are not charitable You want to make all of the decisions in relation to the organisation yourself

4 Community Interest Company (CIC) Key points: Can be established as a company limited by guarantee or a company limited by shares at Companies House Needs to have a purpose which benefits the community (widely interpreted) and certain restrictions on asset distribution The CIC Regulator needs to approve the establishment Regulated by Companies House and the CIC Regulator

5 Community Interest Company (CIC) May be the right choice for you if: You want to carry out more commercial activities than a charity can, but still for community benefit You want to benefit from the social enterprise brand You want to raise equity finance and pay dividends (but only up to certain limits) You want employees to be directors May not be the right choice for you if: Organisations you are likely to seek funding from will only fund charitable organisations You need to benefit from charitable tax reliefs You want more flexibility in terms of activities

6 Non-charitable Company Limited by Guarantee (CLG) Key points: Established at Companies House as a company limited by guarantee (no shares, just members) No specific requirements as to what purposes or activities the company has Only regulator is Companies House

7 Non-charitable Company Limited by Guarantee (CLG) May be the right choice for you if: You do not want to be subject to restrictions on your activities You want to have employees who are directors, or be the sole director You want to minimise regulation and the burden of filing with different regulators You want to set up your organisation very quickly May not be the right choice for you if: You need to have charitable status to obtain funding You want to raise equity finance and pay dividends You want to have the brand of a charity or CIC

8 Contact details Erica Crump Senior Associate Charity & Social Enterprise Department Bates Wells & Braithwaite London LLP 2-6 Cannon Street London EC4M 6YH Tel: Joanna Stokes Solicitor Charity & Social Enterprise Department Bates Wells & Braithwaite London LLP 2-6 Cannon Street London EC4M 6YH Tel:


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