Ltd Comany and charity compliance
Discussion
I have been on the respective websites for clarification, but they need NAY Want to know the organisation you are enquiring about
At the moment i dont want to mention who they are just in case they are acting within the parameters, but if they are not i need to give they guys a heads up as they are already on a sticky wicket.
So the question is this
As the org concerned is both a Ltd Company and registered as a Charity ,If an increase in subscriptions is proposed ,can the trustees just announce it OR must it be put to the members for a vote at the AGM or EGM is necessary?[
They are new to this and i feel that are still running it as a small club, but have had some rather substantial legacies left to them recently ,and i want them to do everything correctly.
I do notice that the Companies House and the Charities commission take a dim view of non compliance, and if i can get this nipped in the bud i will
At the moment i dont want to mention who they are just in case they are acting within the parameters, but if they are not i need to give they guys a heads up as they are already on a sticky wicket.
So the question is this
As the org concerned is both a Ltd Company and registered as a Charity ,If an increase in subscriptions is proposed ,can the trustees just announce it OR must it be put to the members for a vote at the AGM or EGM is necessary?[
They are new to this and i feel that are still running it as a small club, but have had some rather substantial legacies left to them recently ,and i want them to do everything correctly.
I do notice that the Companies House and the Charities commission take a dim view of non compliance, and if i can get this nipped in the bud i will
It will depend on what the articles of association say as to whether it needs to be put to members.
Go to https://beta.companieshouse.gov.uk/ , put in the company name, and you should be able to find a copy. As it's a charitable company, check who is a "member" in the company law sense (and therefore has voting rights if it is something that needs to be put to the members). In a lot of charitable companies, the trustees and (in the company law sense) members are one and the same.
Go to https://beta.companieshouse.gov.uk/ , put in the company name, and you should be able to find a copy. As it's a charitable company, check who is a "member" in the company law sense (and therefore has voting rights if it is something that needs to be put to the members). In a lot of charitable companies, the trustees and (in the company law sense) members are one and the same.
I can answer your question but first...
A charity can own a limited company but not vice-versa (unless the regs have changed recently). Many charities operate a ltd company to generate a profit that goes back to the charity. Most charity retailer operations are done this way. But either way, you can't have one that is also the other; they have to be two separate legal entities. There are options on structure that sort of combine both. For a while, I run a Community Radio station that was a "A company limited by guarantee without shareholders" (shareholders replaced by 'members')....but even so, this was still a company, not a registered charity.
I would urge you to gain insight and clarity into the corporate structure first. If the charity is operating as a company, then that is a big no no.
But that aside and to answer your question....
The management and trustees of a charity can, providing they are within the basic rules and regs', run the organisation as they see fit. This includes the raising of subscription fees as and when needed without recourse to members.
In an ideal world, the Articles of Association or Charter or some other form of written intent will set this out. If not, then it is good practice to bring this to the members/subcribers either informally or formally via an EGM (at which you only need a quorum and a majority vote - normally) - but there is no 'legal' requirement to do so.....
The only time the Charity Commission would be interested is if there was a substantial shift in the purpose of the charity or if there was any suggestion of financial or operational impropriety.
A charity can own a limited company but not vice-versa (unless the regs have changed recently). Many charities operate a ltd company to generate a profit that goes back to the charity. Most charity retailer operations are done this way. But either way, you can't have one that is also the other; they have to be two separate legal entities. There are options on structure that sort of combine both. For a while, I run a Community Radio station that was a "A company limited by guarantee without shareholders" (shareholders replaced by 'members')....but even so, this was still a company, not a registered charity.
I would urge you to gain insight and clarity into the corporate structure first. If the charity is operating as a company, then that is a big no no.
But that aside and to answer your question....
The management and trustees of a charity can, providing they are within the basic rules and regs', run the organisation as they see fit. This includes the raising of subscription fees as and when needed without recourse to members.
In an ideal world, the Articles of Association or Charter or some other form of written intent will set this out. If not, then it is good practice to bring this to the members/subcribers either informally or formally via an EGM (at which you only need a quorum and a majority vote - normally) - but there is no 'legal' requirement to do so.....
The only time the Charity Commission would be interested is if there was a substantial shift in the purpose of the charity or if there was any suggestion of financial or operational impropriety.
StevieBee said:
I can answer your question but first...
A charity can own a limited company but not vice-versa (unless the regs have changed recently). Many charities operate a ltd company to generate a profit that goes back to the charity. Most charity retailer operations are done this way. But either way, you can't have one that is also the other; they have to be two separate legal entities. There are options on structure that sort of combine both. For a while, I run a Community Radio station that was a "A company limited by guarantee without shareholders" (shareholders replaced by 'members')....but even so, this was still a company, not a registered charity.
I would urge you to gain insight and clarity into the corporate structure first. If the charity is operating as a company, then that is a big no no.
But that aside and to answer your question....
The management and trustees of a charity can, providing they are within the basic rules and regs', run the organisation as they see fit. This includes the raising of subscription fees as and when needed without recourse to members.
In an ideal world, the Articles of Association or Charter or some other form of written intent will set this out. If not, then it is good practice to bring this to the members/subcribers either informally or formally via an EGM (at which you only need a quorum and a majority vote - normally) - but there is no 'legal' requirement to do so.....
The only time the Charity Commission would be interested is if there was a substantial shift in the purpose of the charity or if there was any suggestion of financial or operational impropriety.
A company limited by guarantee can be a registered charity.A charity can own a limited company but not vice-versa (unless the regs have changed recently). Many charities operate a ltd company to generate a profit that goes back to the charity. Most charity retailer operations are done this way. But either way, you can't have one that is also the other; they have to be two separate legal entities. There are options on structure that sort of combine both. For a while, I run a Community Radio station that was a "A company limited by guarantee without shareholders" (shareholders replaced by 'members')....but even so, this was still a company, not a registered charity.
I would urge you to gain insight and clarity into the corporate structure first. If the charity is operating as a company, then that is a big no no.
But that aside and to answer your question....
The management and trustees of a charity can, providing they are within the basic rules and regs', run the organisation as they see fit. This includes the raising of subscription fees as and when needed without recourse to members.
In an ideal world, the Articles of Association or Charter or some other form of written intent will set this out. If not, then it is good practice to bring this to the members/subcribers either informally or formally via an EGM (at which you only need a quorum and a majority vote - normally) - but there is no 'legal' requirement to do so.....
The only time the Charity Commission would be interested is if there was a substantial shift in the purpose of the charity or if there was any suggestion of financial or operational impropriety.
Europa1 said:
A company limited by guarantee can be a registered charity.
Ahh - well, hence the caveat on changes in regs! I used to work for Barnardo's Publications Ltd which was the trading division of Barnardo's - and thinking about it, the former no longer exists but they still do much the same thing!StevieBee said:
Europa1 said:
A company limited by guarantee can be a registered charity.
Ahh - well, hence the caveat on changes in regs! I used to work for Barnardo's Publications Ltd which was the trading division of Barnardo's - and thinking about it, the former no longer exists but they still do much the same thing!silverfoxcc said:
Thanks for the info
Is there anywhere i can read the memorandum of Articles of Association?
I have tried Companies House, but just get the Directors and reg address, even though the google search does mention it
Charities commission website might help, as might the charities own site, or ask them?Is there anywhere i can read the memorandum of Articles of Association?
I have tried Companies House, but just get the Directors and reg address, even though the google search does mention it
What’s the charity? One of us might be able to help if you tell us a bit more
silverfoxcc said:
Thanks for the info
Is there anywhere i can read the memorandum of Articles of Association?
I have tried Companies House, but just get the Directors and reg address, even though the google search does mention it
That doesn't sound right. Is there anywhere i can read the memorandum of Articles of Association?
I have tried Companies House, but just get the Directors and reg address, even though the google search does mention it
Once you've found the company and clicked on its name, it should bring up a screen of basic information such as registered office and when various filings are next due. Above that, click on the Filing History tab, then on that screen, click the "Incorporation" box. That should then bring up the Mem & Arts, plus any amendments.
The place you want to look is https://beta.companieshouse.gov.uk
When you have found the company you want, there should be three tabs you can select (1) basic information (2) filing history (3) people. (Cannot remember if Jose are the exact titles)
Go to (2) and scroll down to the incorporation documents. Articles should be there
When you have found the company you want, there should be three tabs you can select (1) basic information (2) filing history (3) people. (Cannot remember if Jose are the exact titles)
Go to (2) and scroll down to the incorporation documents. Articles should be there
A charity can be a Ltd company.
A charity can own a Ltd company (usually a trading subsidiary).
A charity can be "owned" by a Ltd company (in the sense that the charity has only one member, which is a Ltd company).
Subject to the Charities Acts (several of them), a Charity can do what it likes providing its governing documents allow it.
Also note that the members of a charity in law may not be the same as the people who think themselves "members" by paying subs - but they may be.
Also note that the Charity Commission likes charities to have substantial reserves and be operating at a surplus. Legacies + subs increases may not be incompatible.
Finally, don't forget the Charities can have "restricted" and "unrestricted" funds. A bequest might be "restricted" (i.e. be given for a particular purpose or with strings attached in some other way) in which case it could not be used for general expenses.
A charity can own a Ltd company (usually a trading subsidiary).
A charity can be "owned" by a Ltd company (in the sense that the charity has only one member, which is a Ltd company).
Subject to the Charities Acts (several of them), a Charity can do what it likes providing its governing documents allow it.
Also note that the members of a charity in law may not be the same as the people who think themselves "members" by paying subs - but they may be.
Also note that the Charity Commission likes charities to have substantial reserves and be operating at a surplus. Legacies + subs increases may not be incompatible.
Finally, don't forget the Charities can have "restricted" and "unrestricted" funds. A bequest might be "restricted" (i.e. be given for a particular purpose or with strings attached in some other way) in which case it could not be used for general expenses.
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