We help and advise a large number of charities who want to become charitable companies. We have developed an Implementation Guide to help people through the process.
Due to the delayed launch of the CIO (Charitable Incorporated Organisation) this is still the only way open to charities who need both limited liability for their trustees and corporate entity. It is the tried and tested route and is recommended by the Charity Commission.
Following incorporation, we can offer a Company Secretary service to relieve your charity of the administrative burden of complying with Companies House.
Pros and Cons at a glance
Corporate entity:
Limited liability
Contracts can be held by the company rather than trustees individually.
Property can be owned by the company rather than trustees individually.
Mortgage can be held by the company rather than trustees individually.
Mitigation of risk through limited liability.
Protection from potential claims by third parties as the company is liable rather than trustees individually provided they have acted appropriately.
If there are debts, these are owed by the company rather than trustees individually – assuming that trustees have not given personal guarantees or entered into contracts in a personal capacity.
Strong position to convert to the CIO as and when it becomes available should you wish to convert.
Impact:
Additional admin during the changeover.
Opening new company bank account.
Changing Gift Aid Declarations.
New stationery.
Complying with Companies House requirements.
Complying with (HMRC) Inland Revenue requirements re Corporation Tax etc.
Additional impact:
Child protection policy, vulnerable adults’ policy, all trustees will also be required to be CRB checked prior to charity registration.
Pensions – you will need to take independent advice to ensure that these are transferable and there is no added liability.