Charitable trusts must register with the Charity Commission if they have income over £5,000 per year. What will you put in your neighbourhood newsletter? There is no protection from liability for the trustees. Many not-for-profit organisations have members who take part in running the organisation by voting. A charitable trust is a type of charity run by a small group of people known as trustees. It is ideal for many small groups, especially those without staff or premises. This means the reporting requirements are simpler for CIOs than for charitable companies. The following structures are incorporated: The following structures are unincorporated: Whether you choose to incorporate or not, you will also need to consider how your organisation will be funded, whether it will have voting members, and whether it meets the legal requirements to be a charity to help you work out which structure is best for you. Most community groups and charities are run in this way. This must be clear from the governing document, so if you wish to set up a charitable company you should use the model Memorandum and Articles of Association approved by the Charity Commission. Some social enterprises have members who have invested money in the organisation, and/or are customers of the organisation. This page provides simple explanation of different types of not-for-profit organisation, and what to consider when choosing a legal structure. There is a model trust deed on the Charity Commission website. Most charities adopt one of the following legal structures: Which structure is best depends on whether the organisation will have voting members,whether it will be incorporated, and how it will be funded. If your group is not charitable you do not need to register with or report to anyone. An unincorporated association is a membership organisation. To establish a company, you must adopt a governing document called a Memorandum and Articles of Association, and submit it to Companies House. An incorporated organisation has “legal personality” which means it can enter into contracts, buy or lease property, and employ people in its own right. It is quite a new legal structure – it was introduced in 2013. Profits must be used for the benefit of the community (although interest on shares can be paid to members, up to a maximum rate). It is the easiest, quickest and cheapest way for a group to set itself up. In general, membership to a Cooperative Society is open to people who use the services provided by the society, or work for the society, and profits may be distributed to members providing this is not the primary purpose of the organisation. A Charitable Incorporated Organisation (CIO) is a corporate form of business designed for (and only available to) charitable organisations in the United Kingdom.CIO status is conferred by the Charity Commission on application by a charity, whether new or existing.. Many banks and building societies offer special current accounts for voluntary organisations and charities, and most give free banking if the account is in credit. All you need to do is write and agree a constitution. “Charity” is not a legal structure in and of itself. This gives the trustees, directors or committee members some protection, although they still have liability for debts caused by negligence or poor financial management.