What structures are suitable for charities?

Charities wishing to register with the Charity Commission can take one of four legal structures:

  • Companies Limited by Guarantee (CLG) – (also often known as not for profit companies) that exist once an application made by founding members to Companies House is approved.

  • A Charitable Incorporated Organisation (CIO) – can only be charitable, and only exists if the Commission approves an application made by its founding members.

  • Trusts – are created by adopting a trust deed which declares that an initial asset (or amount of money) is held by trustees on behalf of beneficiaries.

  • Unincorporated Groups – are created by founding members adopting a constitution.

Other structures are available but cannot register as charities with the Charity Commission. Examples include educational organisations (such as universities and colleges), and registered societies (organisations registered with the Financial Conduct Authority). While the Clore Strategic Review of Governance Development Needs 2016/17 found that the overwhelming number of Arts Council England National Portfolio Organisations (NPOs) were CLGs, the Charity Commission says that the proportion of new arts organisations applying for CIO status is increasing.

Companies limited by shares, community interest companies, sole traders and legal partnerships cannot be charities.

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