Types of UK Charity Companies
All charities in the UK have to be registered with the Charities Commission but there are a number of legal formats that a charity can have.
The type of format chosen will depend on a number of factors but the most common governing documents that make up a given format are:-
- Trust Deed
- the assets of the charity are held on behalf of the charity by trustees, who although responsible for those assets do not own them , usually in a situation where grants and donations are made.
- Constitution
- similar to a trust deed but more flexible with members instead of trustees usually used where there is group activity taking place.
- Company Limited by Guarantee
- memorandum and articles of association with directors and members, registered at Companies House, often used instead of a constitution especially where there may be a need to limit potential liability.
- Community Interest Company
- memorandum and articles of association with directors and shareholders but able to pay a commercial return on investment, used where an element of trade may take place to create a profit for the investor, as well as benefiting the community. Registered at Companies House and requiring approval by a regulator.
Whatever governing document you use will need to state the aims of the charity together with the mechanisms for its administration.
After choosing one of the above formats it is still necessary to register with the Charity Commission. This is not an automatic procedure but without one of the above governing documents you cannot be registered.