Findacure Workshop Session 12 th September 2014 Trainer: Grace - - PowerPoint PPT Presentation

Findacure

Workshop Session

12th September 2014 Trainer: Grace Smith

Objective of the session

Participants will

• understand the various legal

structures available to voluntary groups

• understand the requirements of

each

• understand the responsibilities of

committee members

Setting up a group

Questions to ask at the outset. What is our purpose? Who will benefit? Where do we want to vest control? How important to us is charitable status? Are we likely to engage in significant commercial activity?

6 legal structures you may have encountered

• an unincorporated association
• a trust
• a company limited by guarantee
• charitable incorporated organisation
• a community interest company

(CIC)

• an industrial and provident society

Benefits of charity status

• Tax advantages in income
• Business rate tax relief
• Enhanced standing (e.g. When

seeking donations)

• Increased access to grant funding

Restrictions for charities

• Increased regulation and scrutiny
• Limits on trading activity
• Restrictions on payments to

Trustees and connected persons

Charities

In order to qualify as a charity, the

• rganisation must
• have charitable objects within the terms

defined by the Charities Act 2011

• show evidence of public benefit

Charities with an annual income above £5,000 must register with the Charity Commission

Trustees MUST

• Comply with audit requirements
• Submit an annual return to the

Charity Commission updating details comply with additional reporting requirements according to level of income

Responsibilities

Trustees

• must act prudently, lawfully and

according to the governing documents

• cannot delegate responsibility
• In certain rare circumstances, can be

held personally liable

• liability is unlimited even if a Company

limited by guarantee but is mitigated under the Charities Act 2011

Duties

Trustees have a duty

• to be informed
• to act in the best interests of the
• rganisation
• to avoid conflicts of interest

Company Directors

• Directors are elected by the members
• Where the company is a registered

charity, the directors are also trustees

• Directors’ liability is limited to company

assets so long as they have not acted negligently, criminally or in breach of trust.

Directors MUST

• File a copy of the Annual Report

and Accounts at Companies House within 9 months from the end of the accounting period

• Submit an Annual Return to

Companies House NB Late filing carries automatic

• penalties. Failure to file accounts

is a criminal offence

Charitable Incorporated Organisation (CIO)

• Must have charitable objects
• Has the benefit of limited liability
• Is regulated only by the Charity

Commission

• Is not subject to company law

BUT

• is more restricted in the terms of

the Constitution which must follow Charity Commission models

Community Interest Company (CIC)

• Must have a social purpose
• Is regulated by the CIC Regulator
• Is not a charity
• No restriction on payment of

Directors

• May distribute profits subject to a

cap

• Assets are locked in.