Q2A

Got an enquiry ........

Please can you advise;
I represent a network of support groups which has met for a while and now wishes to do
things like - have a website, offer workshops to others, fund speakers etc. so we need to
form ourselves into a recognised organisation so that we can eg invoice for membership,
have a bank account etc.
Could you please tell us how to go about, and the pros and cons of becoming a charity, or
a not for profit organisation, or a company limited by gurantee - or any other alternative
that might be suitable. it seems to be a bit of catch 22 situation and we would be grateful
for your advice. thanks

This is our reply.......

Hi and thanks for your email.

There are lots of different kinds of organisational structures, and each will have their own
pros and cons. From our research there appears to be 5 main types of structure for
community groups, the first 2 you mention yourself:

· A charity
· A company limited by guarantee
· A community interest company, similar to a company limited by guarantee but it
must pass a community interest test
· A charitable incorporated organisation which is a bit more like a company than a
charity
· An Industrial and Provident Society which covers co-operatives

Some of the pros and cons you may want to consider are, for example, if you set up as a
charity you will have to follow the Charity Commission's rules to keep your charitable
status and submit annual accounts, but on the other hand charities are exempt from e.g.
Income Tax, Capital Gains Tax on their income and assets. The advantage of a Company
Limited by Guarantee is that members' personal assets aren't at risk if it folds; a possible
downside is that information on the company directors is publicly available at Companies
House.

There will be lots of fine distinctions between all of these different structures and because
we aren't legally trained we're unable to walk you through them all. But there are
organisations which are qualified to help you to decide which would be the best structure
for you to use and these are listed below.

What we suggest you do first of all is make a list of all the things you think your
organisation will need and then contact one of the organisations below. Here are some
ideas to get you started:

· A name
· A structure
· Premises
· Employees - payroll, tax returns etc.
· Marketing/publicity
· ICT services

The following organisations can provide you with free support and advice:

· Business Link Northwest, Brian Johnson Way, Preston. PR2 5PE. Telephone:
0845 00 66 888, website: <http://www.businesslink.gov.uk/bdotg/action/layer?site=102
&topicId=1085161962>
· Council for Voluntary Service, Unit 23/27 Guild Hall Arcade, Lancaster Road,
Preston. Telephone 01772 251108. Website: <http://www.prestoncvs.org>
· The Charity Commission, Charity Commission Direct, PO Box 1227, Liverpool.
L69 3UG. Telephone 0845 300 0218, website:
<http://www.charitycommission.gov.uk/Start_up_a_charity/default.aspx>

Once again we apologise for not being able to give you an in-depth reply but we hope
we've given you enough information to help you get started. If you think we can help
further please email us again. We wish you success!

Best wishes from q2a.

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