Set up a Charity
- Charitable incorporated organization (CIO)
- Charitable company limited by guarantee
- Unincorporated association
In this article:
No share capital
In a company limited by guarantee, there are no shareholders only members who control the company and there is no share capital. Those who run the company (members) are protected from personal liability if the company was ever to go into debt.
Not for profit
Limited by guarantee are non-profit companies meaning they do not distribute their profits to members, but rather for use within the company, or other purposes.
You must run your charity in a way that’s consistent with and supports its purposes. Registered charities must provide public, up-to-date information about their activities and finances.
Use of the word 'Charity' in company name
The Companies Act considers “Charity” to be a sensitive word, it can be used in your company name if only you're recognised as a charity by the Charity Commission.
Incorporate your company first, and then register with the Charities Commission once you meet their criteria. Once you are a recognised charity, you can simply change the company name.
Register a charitable company limited by guarantee
A charity is set up as a limited by guarantee (a company) and then as a charity with the Charity Commission. The objects and purpose of every charity must be 'charitable' as defined by law, and furthermore, they must also fulfil the 'public benefit test' as set out in the Charities Act. The company's articles of association should reflect this.
We do not form Community Interest Companies (CIC's). Should you want to set up another charity type other than charitable limited by guarantee, please visit the Charity Commission website.
Our articles of association for a limited by guarantee company include the non-profit distribution and one member one vote clauses. However, it is highly recommended for you to amend the articles according to your company's needs.
This article provides general advice and so we recommend for you to seek further advice from an accountant or business advisor.