Setting Up A Charity 2
In the last blog we discussed the three broad structures linked to Charitable Organisations, we will now look at the three models in which a Corporate Charity can be modeled.
CLG A Charity Company Limited By Guarantee.
This model is appropriate for non-profit charitable organisations such as Clubs, Community Enterprises and possibly some co-operatives.
A Charity Limited by Guarantee is similar to a private company limited by Shares, however it cannot generate income through the sales of its membership interests.
A CLG is required to register with both the Charity Commission and the Registrar of Companies as will be required to submit documentation to both.
CIO A Charitable Incorporated Organisation
A Charitable Incorporated Organisation came into effect in 2012. The idea behind a CIO was to give the organisation all the protection of a legal company but without the necessity of having to submit filing to both the Charity Commission and Companies House. (Companies House Charge for filing annual returns etc.)
The CIO has two models to choose from, the Foundation Model and the Association Model.
The basic difference between both is that with the Foundation Model the trustees of the Charity are only the members off the CIO, whereas the Association Model the Charity Trustees are a distinct group away from the Charity.
If you are interested in setting up any of the above models for your organisation you can download them from the Charity Commission Website, however as in all cases I do advise getting specialist advise from a Charity Expert or Solicitor.
CIC A Community Interest Company
Strictly speaking this is not a charitable company but a limited Liability Company. The Limited Liability means it can either be limited by Shares or guarantee. Even though it is not “Charitable” it must provide benefit to a particular community.
A CIC’s assets income property etc must be used for the benefit of the company. It does not have trustees but rather Directors who can be expected to receive a reasonable remuneration. More importantly there is no limit to the level of profit a CIC can make as it will all be used for the benefit of the community it was designed to support.