Setting up a Charity Limited by Guarantee
They are designed for use where founders decide that their charity should be set up as a company (rather than an organization in unincorporated form), and that it should be a company limited by guarantee. These Charity Memorandum and Articles take into account the needs of charities and the requirements of company law, charity law, and the Charity Commission.
A company limited by guarantee is a form of legal entity suited to charities (and is used by many charities) because it is appropriate for not-for-profit organizations. These new documents can be used for a new charity’s constitution, or for a charity which no longer wishes to remain in unincorporated form. We also provide additional guidance as to when it will be appropriate to use the Charity Memorandum and Articles for a particular charity.
Some charities will wish to use other forms of constitution. Very small charities will probably find that some other form will be more suitable for them unless they expect to grow rapidly to a substantial size, but one significant advantage of using a company limited by guarantee is that it provides greater protection from liability for its trustees than a charity in unincorporated form.
Over the next few months we will be adding a completely new portfolio of template documents and guidance notes especially for Charities. They will cover a range of topics, and are designed to help not only those founding new charities, but also trustees of existing charities who have to deal with various compliance, fundraising and many other matters related to the day to day running of their charities. Our new Charities documents will also include constitutions for other forms of charity and guidance as to when they should be used.
All of these new charity documents and notes will be added to our Business folder. Those relating to setting up a new charity in a corporate form (rather than say, as an unincorporated association or trust), will also be included in the Corporate folder.
The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.