Types of Organisation: Difference between revisions
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This page is 'redundant' as Freegle decided to adopt a new structure in 2014. This page has therefore been recategorised as an historic document. | |||
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The following is a rough guide of different types of legal structure that Freegle or a trading subsidiary could adopt: | The following is a rough guide of different types of legal structure that Freegle or a trading subsidiary could adopt: | ||
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|- style="font-style:italic; color:green" | |- style="font-style:italic; color:green" | ||
!''Legal structure'' | |||
!''Summary: most typical features'' | |||
!''Ownership, governance and constitution'' | |||
!''Is it a legal person distinct from those who own and/or run it?'' | |||
!''Can its activities benefit those who own and/or run it?'' | |||
!''Assets 'locked in' for community benefit?'' | |||
!''Can it be a charity and get charitable status tax benefits?'' | |||
!''Differences in the law as it applies in Scotland or Northern Ireland?'' | |||
|- | |- | ||
|''Unincorporated | |'''Unincorporated Association Informal''' | ||
|No general regulation of this structure | |||
| | |Need to make own rules. Nobody owns - governed according to own rules. | ||
| | |No, which can create problems for contracts, holding property and liability of members. | ||
| | |Depends on own rules. | ||
| | |Would need bespoke drafting to achieve this. | ||
| | |Yes, if it meets the criteria for being a charity. | ||
| | |No specific differences. | ||
| | |||
|- | |- | ||
|''Trust'' | |'''Trust''' | ||
| | |A way of holding assets so as to separate legal ownership from economic interest. | ||
| | |Assets owned by trustees and managed in interests of beneficiaries on the terms of the trust. | ||
| | |No, which means the trustees are personally liable. | ||
| | |Not usually. Trustees/directors can only benefit if trust, court or Charity Commission give permission. | ||
| | |Yes, if trust established for community benefit. | ||
| | |Yes, if it meets the criteria for being a charity. | ||
| | |No, subject to differences between English and Scots trust law. | ||
|- | |- | ||
|''Limited company (other than Community Interest Company) [[http://www.companieshouse.gov.uk]] '' | |'''Limited company (other than Community Interest Company) [[http://www.companieshouse.gov.uk]] ''' | ||
| | |Most frequently adopted corporate legal structure; can be adapted to suit most purposes. | ||
| | |Directors manage business on behalf of members. Considerable flexibility over internal rules. | ||
| | |Yes, members' liability limited to amount unpaid on shares or by guarantee | ||
| | |Yes, but no dividends etc to members if it is a company limited by guarantee. | ||
| | |Would need bespoke drafting in articles, which could be amended by members. | ||
| | |Yes, if it meets the criteria for being a charity. | ||
| | |Scotland: no. Northern Ireland: separate but similar legislation. | ||
|- | |- | ||
|''Community interest company (CIC) [[http://www.cicregulator.gov.uk]'' | |'''Community interest company (CIC) [[http://www.cicregulator.gov.uk]''' | ||
| | |An effective limited company structure for social enterprise with secure 'asset lock' and focus on community benefit. | ||
| | |As for other limited companies, but subject to additional regulation to ensure community benefits. | ||
| | |Yes, members' liability limited to amount unpaid on shares or by guarantee. | ||
| | |Yes, but must benefit the wider community. Can pay limited dividends to private investors and directors can be paid. | ||
| | |Yes, through standard provisions which all CICs must include in their constitutions. | ||
| | |No, but can become a charity if it ceases to be a CIC. | ||
| | |Scotland: no. Northern Ireland: legislation not yet in place. | ||
|- | |- | ||
|''Industrial & Provident Society (IPS) (Co-operative)'' | |'''Industrial & Provident Society (IPS) (Co-operative)''' | ||
| | |For bona fide co-operatives that serve members’ interests by trading with them or otherwise supplying them with goods or services. | ||
| | |Committee / officers manage on behalf of members. One member, one vote (regardless of size of respective shareholdings). | ||
| | |Yes, members liability limited to amount unpaid on shares. | ||
| | |Yes, but should do so mostly by members trading with society, using its facilities etc, not as a result of shareholdings. | ||
| | |Would need bespoke drafting in articles, which could be amended by members. | ||
| | |No, would have to be constituted as community benefit type of IPS. | ||
| | |Scotland: no. Northern Ireland: separate but similar legislation. | ||
|- | |- | ||
|''Industrial & Provident Society (IPS) (Community Benefit Society (BenComm))'' | |'''Industrial & Provident Society (IPS) (Community Benefit Society (BenComm))''' | ||
| | |Benefit community other than just own members and have special reason not to be companies. | ||
| | |Like Co-op type, but new legislation provides option of more secure form of 'asset lock'. | ||
| | |Yes, members liability limited to amount unpaid on shares. | ||
| | |Must primarily benefit non-members - 'asset lock' applies. | ||
| | |Yes, asset lock only survives dissolution if new statutory form of asset lock adopted. | ||
| | |Yes, if it meets the criteria for being a charity. | ||
| | |Scotland: no. Northern Ireland: legislation not yet in place. | ||
|- | |- | ||
|''Charitable Incorporated Organisation'' | |'''Charitable Incorporated Organisation''' | ||
| | |First ready-made corporate structure specifically designed for charities. | ||
| | |Similar to company but with different terminology, eg ''charity trustee'' instead of ''director''. | ||
| | |Yes, members either have no liability or limited liability. | ||
| | |Members are not permitted to benefit and charity trustees are only able to benefit if constitution, court or Charity Commission give permission. | ||
| | |Yes. | ||
| | |Cannot be anything but a charity, and must meet the criteria for being a charity. | ||
| | |Scotland: separate but similar legislation and regulator. Northern Ireland: legislation not yet in place. | ||
[[http://www.fsa.gov.uk/pages/doing/small_firms/msr/societies/index.shtml]] | [[http://www.fsa.gov.uk/pages/doing/small_firms/msr/societies/index.shtml]] | ||
[[http://www.charity-commission.gov.uk/registration/charcio.asp]] | [[http://www.charity-commission.gov.uk/registration/charcio.asp]] | ||
|- | |- | ||
|} | |} | ||
Back to [[Trading Subsidiary Working Team]] or [[Charitable Status]] | Back to [[Trading Subsidiary Working Team]] or [[Charitable Status]] | ||
[[category: | [[category:Historic documents]] |
Latest revision as of 14:17, 31 January 2015
This page is 'redundant' as Freegle decided to adopt a new structure in 2014. This page has therefore been recategorised as an historic document.
....
The following is a rough guide of different types of legal structure that Freegle or a trading subsidiary could adopt:
(For more general information about business structures, including other options such as partnerships and limited liability partnerships, see http://www.businesslink.gov.uk.)
Legal structure | Summary: most typical features | Ownership, governance and constitution | Is it a legal person distinct from those who own and/or run it? | Can its activities benefit those who own and/or run it? | Assets 'locked in' for community benefit? | Can it be a charity and get charitable status tax benefits? | Differences in the law as it applies in Scotland or Northern Ireland? |
---|---|---|---|---|---|---|---|
Unincorporated Association Informal | No general regulation of this structure | Need to make own rules. Nobody owns - governed according to own rules. | No, which can create problems for contracts, holding property and liability of members. | Depends on own rules. | Would need bespoke drafting to achieve this. | Yes, if it meets the criteria for being a charity. | No specific differences. |
Trust | A way of holding assets so as to separate legal ownership from economic interest. | Assets owned by trustees and managed in interests of beneficiaries on the terms of the trust. | No, which means the trustees are personally liable. | Not usually. Trustees/directors can only benefit if trust, court or Charity Commission give permission. | Yes, if trust established for community benefit. | Yes, if it meets the criteria for being a charity. | No, subject to differences between English and Scots trust law. |
Limited company (other than Community Interest Company) [[1]] | Most frequently adopted corporate legal structure; can be adapted to suit most purposes. | Directors manage business on behalf of members. Considerable flexibility over internal rules. | Yes, members' liability limited to amount unpaid on shares or by guarantee | Yes, but no dividends etc to members if it is a company limited by guarantee. | Would need bespoke drafting in articles, which could be amended by members. | Yes, if it meets the criteria for being a charity. | Scotland: no. Northern Ireland: separate but similar legislation. |
Community interest company (CIC) [[2] | An effective limited company structure for social enterprise with secure 'asset lock' and focus on community benefit. | As for other limited companies, but subject to additional regulation to ensure community benefits. | Yes, members' liability limited to amount unpaid on shares or by guarantee. | Yes, but must benefit the wider community. Can pay limited dividends to private investors and directors can be paid. | Yes, through standard provisions which all CICs must include in their constitutions. | No, but can become a charity if it ceases to be a CIC. | Scotland: no. Northern Ireland: legislation not yet in place. |
Industrial & Provident Society (IPS) (Co-operative) | For bona fide co-operatives that serve members’ interests by trading with them or otherwise supplying them with goods or services. | Committee / officers manage on behalf of members. One member, one vote (regardless of size of respective shareholdings). | Yes, members liability limited to amount unpaid on shares. | Yes, but should do so mostly by members trading with society, using its facilities etc, not as a result of shareholdings. | Would need bespoke drafting in articles, which could be amended by members. | No, would have to be constituted as community benefit type of IPS. | Scotland: no. Northern Ireland: separate but similar legislation. |
Industrial & Provident Society (IPS) (Community Benefit Society (BenComm)) | Benefit community other than just own members and have special reason not to be companies. | Like Co-op type, but new legislation provides option of more secure form of 'asset lock'. | Yes, members liability limited to amount unpaid on shares. | Must primarily benefit non-members - 'asset lock' applies. | Yes, asset lock only survives dissolution if new statutory form of asset lock adopted. | Yes, if it meets the criteria for being a charity. | Scotland: no. Northern Ireland: legislation not yet in place. |
Charitable Incorporated Organisation | First ready-made corporate structure specifically designed for charities. | Similar to company but with different terminology, eg charity trustee instead of director. | Yes, members either have no liability or limited liability. | Members are not permitted to benefit and charity trustees are only able to benefit if constitution, court or Charity Commission give permission. | Yes. | Cannot be anything but a charity, and must meet the criteria for being a charity. | Scotland: separate but similar legislation and regulator. Northern Ireland: legislation not yet in place. |
Back to Trading Subsidiary Working Team or Charitable Status