Legal Structures Guide

Legal Structures Guide

This guide has been produced primarily for people who are thinking about setting up a new voluntary or community group and outlines some of the key considerations and steps that need to be taken. It should also be a valuable resource for established groups who may be wishing to review their current status. It is not intended to comprise specific legal advice, which, if required, needs to be sought from an appropriate source. Charitable and voluntary organisations in England have a choice about the type of legal structure they adopt. Each type has its advantages and disadvantages. This information sheet describes the different types of legal structures, to help you decide which is most suitable for your organisation.

If you want support on what is right for you and want to talk to one of the WVA team, contact - info@warringtonva.org.uk

Before you start

It is important to undertake some research and do some networking prior to setting up a group.

This will help you to find out whether or not a similar group exists at a local, regional or national level and whether there is any available evidence of need.

In the eyes of the law, an organisation is either:

A collection of individuals working together, such as an unincorporated organisation or charitable trust (Types of unincorporated organisations include: Association, Charitable Association, Charitable Trust and Friendly Societies)

Or

An incorporated organisation that exists as a separate legal entity from the individuals belonging to it. Types of incorporated organisations: Company Limited by Guarantee, Community Benefit Societies, Community Interest Companies and Charitable Incorporated Organisation.

 

Unincorporated and incorporated – What’s the difference?

Unincorporated Incorporated
Unlimited personal liability (joint & several) Limited personal liability (usually £1), i.e. committed to a maximum loss
Ownership of property by individual people Ownership of property by the organisation
No statutory framework – no governing law (unless a charity) Clear statutory framework (with penalties for non-compliance and automatic fines for late returns)
No real accountability (unless a charity) Clear accountability both to members/ shareholders and to a regulatory body
No automatic set up/running costs Set up and ongoing costs (e.g. filing fees)

 

Read about Unincorporated Organisations / Constituted Groups

Read about Registered Charities & similar structures

Read about CICs, CIOs & other Incorporated Structures

Read about Constitutions & Governing Documents

Resource Category: 
Legal Matters
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