YOU NEED TO READ THIS BEFORE REGISTERING YOUR CHARITY.
Charity registration can be a very daunting process. A lot of organizations are set up for the purpose of giving and supporting a need or a cause.
WHEN TO REGISTER
In the UK, a lot of charities usually have common causes and for administration reasons. The Charity Commission therefore usually encourages charities to work together rather than setting new ones.
A charity must register with Charity Commission in the UK when
- Its income is at least £5,000 per year or it’s a charitable incorporated organization (CIO)
- It’s based in England or Wales.
When submitting the application, You would have to provide the following.
- You would have to explain your charitable purpose to Charity Commission. A charitable purpose is simply how your Charity intends to help the public or public benefits of your Charity. This could be towards relieving poverty, education, religion, health, saving lives etc.
- You would have to explain to Charity Commission how you intend to run the organization for public benefit.
- You would have to provide Proof of income for your organization showing that the income received within a year period is more than £5000.
- This proof could be a recent bank statement,
- The latest published Accounts that is approved by an independent examiner or auditor.
- It could also be a formal offer of Funding from a recognized body.
- Organisation information such as name, bank details, contact details, trustees name and date of births and contact details.
- The trustees would also have to fill a Trustee Eligibility Declaration Form.
- A copy of the Governing Document.
HOW TO STRUCTURE YOUR CHARITY.
Different structures available:
When registering as a charitable company.
To register as a charitable company, the volunteers would have to register the charity with companies house first.
The consequence of registering as Charitable Company.
The organization would not only deal with the administration of the Charity Commission but also the Companies house. They would have to fill in accounts yearly and Submit confirmation statements.
Charitable incorporated organization.
I have to say this is my favorite one for smaller charities. As the charity does not have to register a company or deal with the compliance issue of running a company. All they need to do is to register straight away with the Charity Commission.
Advantages of registering as a charitable company or a Charitable incorporated organization.
The trustees have limited or no liability for the organization’s debt or liability.
This would protect the personal interest of the trustees.
Registering as a charitable trust.
This structure is mostly used by individuals that manage the asset such as money investment buildings and land.
Unincorporated charitable association.
This structure is usually used by a group of volunteers that do not really want to deal with the complexity of running a charity but are passionate about running it for a common goal.
The major disadvantages of these forms of structures are that they can’t own a premise or employ staff
STEPS INVOLVED TO REGISTER.
If you are planning on doing the registration by yourself these steps would help, although I always advice professional help
- Prepare all the information and supporting documents required for the registration.
- Choose a name for your organization.
- Choose your Trustees and have the first meeting with them as you would need the minutes of that meeting.
- Decide and write your charitable purposes
- Choose or create a governing document.
- Ensure that the purpose of your organization meets the public benefit requirement.
I have to say it does take time to complete the registration.
ADVANTAGES OF REGISTERING AS A CHARITY.
- The law requires charities to register when their income is over £5000.
- When the organization registers with the HMRC for tax purpose, they could be due for vat or pay a reduced rate of the VAT.
- After registering with HMRC for tax purpose, they would also receive £0.25 on every donation received which would help to provide more funds to serve their charitable purpose. If the individual giving the donations are higher or additional taxpayers they get a refund of tax on the donations they give.
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