Incorporated Charity Status

mysk_girl

Does anyone have any experience of doing this? I am the chair of a preschool committee and we currently operate as an unincorporated charity. Obviously this leaves the committee members open to personal liability - I'm mostly thinking about redundancy payments should the charity fold. As we have 8 employees, some of whom have been employed for many years, redundancy payments could be significant. I'm looking to minimise this by incorporating the charity which (I think) gives limited liability.

I've done some reading, but I can't seem to see if it is very expensive to do?

Any help?

Charityworker

I would like to know the answer to this too. I work for a registered charity where the committee are automatically trustees so we have a problem getting new committee. We were wondering what benefits there are in becoming a charity limited by guarantee.

mysk_girl

http://www.charity-commission.gov.uk/Charity_requirements_guidance/Charity_governance/Good_governance/incqanda.aspx

This is some guidance I've found, but I have no idea about costs? I've just been working out how much we could be liable for, and I reckon redundancy payments could cost us £10k - the only reason we would make redundancies is if we had to fold through lack of funds...

Savvy_Sue

I have a feeling that the law is in a bit of a transitional period atm. Traditionally, many companies have been set up to be Limited Companies as well as charities, with the Trustees of the charity acting as Directors of the Company. However there has been talk about other models, and I don't know how far everything has got.

What I'd suggest is that you contact your local VSC (google Volunteer plus your town / city / county) or any 'umbrella body' you may belong to - there's a national body for playgroups, isn't there? I'd hope that they could give you good advice relevant to your situation.

Failing that, setting up a ltd company doesn't cost that much ... but there are requirements for submitting accounts etc. Which leads to another thought: if you have an accountant or someone who audits your accounts each year, talk to them too!

Savvy_Sue

Just to add that the 'transitional period' I was talking about has just been extended. There's been talk for several years about CIOs, which are meant to reduced the need for charities to register as ltd companies to reduce personal liability.

Anyway, that's been put off some more, so I'd respectfully suggest that you're going to have to become a Ltd company.

Although, your insurance may cover you for the Trustees' liability - assuming no-one's acted improperly.

plzhelpmesave!

Savvy Sue. areyou still online? need some desparately urgent advice!