A great way to transform your professional life and achieve fulfillment is by turning a hobby into a business. However, have you ever thought about registering a charity instead?
If you are committed to fundraising for a philanthropic cause and want to make a difference, this expert guide by Quality Company Formations, the United Kingdom’s experts at firm formations, can help you to learn how to registering a charity company in the UK.
Check your eligibility
Check that your charity is eligible. This mainly requires that your charity be constituted exclusively for public benefit, for instance:
- Education
- Community development
- Human rights
- Environmental protection
- Animal welfare
The Charity Commission will assess your charitable purpose to establish if your organisation is a charity. HMRC will also use this information to determine whether you are entitled to specific tax reliefs.
Help with finding charity trustees
As with any other business, you will have to assign personnel to lead and manage your charity. These are known as trustees. And just like any other job role, you need to agree the key skills, experience and knowledge that each trustee should possess and the specific roles they’ll fulfill, to enable you to run your charity appropriately.
Trustees are usually unpaid volunteers as the organisation is not-for-profit. But they could potentially deduct some of their business expenses.
In general, anyone can be a charity trustee. It also applies to overseas or UK non-residents. But there are certain age restrictions whereby a trustee must be:
- 16 or over – where the charity is a limited company or charitable incorporated organisation (CIO)
- If charity is a trust or unincorporated association, be at least 18 years old
Automatic disqualification could also arise if the potential trustee has an unspent conviction.
Name your charity
The first step is deciding on a name for your registering a charity. You have an official or ‘main’ name and an alternative ‘working name’ if desired. NSPCC, for instance, is the working name, and the main name is ‘The National Society for the Prevention of Cruelty to Children.’
This is like limited companies that have registered names and trading names. And like registered companies, there are rules to adhere to as part of the name of your charity. Your main name must:
- Be unique and unlike any existing charity name
- Avoid offensive words
- Be precise about what the charity does
- Do not violate intellectual property rules
If you want to have the words ‘charity’, ‘charities’ or ‘charitable’ in your main name and working name, you must get approval from the Charity Commission in advance. If your name contains non-English words, you’ll have to translate those when you register your charity too.
Choose a legal structure
Select your preferred type of legal structure. This will dictate how the charity will function. The main options are:
Charitable company: A company that is limited by guarantee, with trustees receiving limited liability. A charitable company must be registered with both Companies House and the Charity Commission.
Charitable incorporated organisation (CIO): Purpose-built for charities. (short registration and limited liability – you must register the charity with The Charity Commission, NOT Companies House.)
Charitable trust: An unincorporated structure, which means trustees have no limited liability protection. It could be a nice solution for a group of trustees to hold on to the assets — money or investments — for social purposes.
Create a governing document
Your charity needs a governing document that explains its purpose, highlights the trustees and their responsibilities, and defines how the organisation will run day-to-day. The type of document you need to create depends on the legal structure you’ve chosen in the previous step:
- Charitable company: articles of association
- CIO: foundation or association constitution
- Unincorporated association: constitution
- Charitable trust: trust deed or will
Register your charity
In England and Wales, you need to legally register a charity with the Charity Commission if its annual income exceeds £5,000 or you choose the CIO legal structure.
To register your charity, you’ll need to provide the following supporting documents:
- Your charity’s charitable purpose(s)
- How the charity benefits the public
- Proof of income (if over £5,000 unless CIO)
You will also need to have the following details about your charity ready:
- Name
- Bank/building society
- Most recent accounts
- Contact details
- Trustees’ names, dates of birth, and contact details
- A PDF copy of the charity’s governing document
The easiest way to register your charity is via a company formation agent like Quality Company Formations. Our expert team will handle everything from Companies House filing to delivering your incorporation documents, and you’ll even get a free domain name to help you create the perfect website for your charity.
Conclusion
The process of registering a charity in the UK is similar to registering any other type of company. You need to choose a legal structure, appoint people to run it, and create a governing document. It’s also quick and simple if you opt for a company formation agent.
