| Over the years, a great number of people have | | | | shareholders, so there is no need for profit |
| considered the question of how to start a charity. So | | | | orientated operations, as there is with normal limited |
| much so, that there are now upwards of 180,000 | | | | companies. It is therefore much easier to fulfil the |
| charities within the borders of the UK. All seeing to a | | | | legal requirements. |
| variety of different needs. This is the first and | | | | How to start a charity - The legal requirements |
| perhaps most important thing to consider when | | | | According to the law, a charity must be started for |
| thinking about how to start a charity. Do you actually | | | | exclusively charitable purposes. In other words, the |
| need to start a charity? Or would it be more | | | | purposes of the charity must be for the public |
| beneficial to your cause to team up with a charitable | | | | benefit. That is, the public as a whole or a section of |
| body that is already in existence? If you have | | | | the public. The purposes cannot be for the benefit of |
| already done your research and your charitable cause | | | | the public if they are illegal, political or merely for the |
| is not being dealt with by another organisation then | | | | benefit of a specific person. |
| you can follow the first steps of starting a charity. | | | | The satisfaction of this legal requirement can be |
| This article is intended to give some guidance to | | | | carried out with relative ease. During the charity |
| those looking for information on how to start a | | | | formation, a clause is drafted into the company's |
| charity. Pointing you in the right direction. | | | | memorandum of association which specifically details |
| Getting Started | | | | the charities objects and who they benefit. This is |
| To get started, it's best to come up with a plan. You | | | | known as the charitable objects clause. In order to |
| might know what your intentions are, but you need | | | | meet the legal requirements placed on those starting |
| to be able to show others. Potential investors, | | | | a charity, it is also important to include two other |
| volunteers, the Charity Commission, all will need to | | | | articles in the memorandum of association. These are |
| know what your charity is has been started to do. | | | | the non-profit clause and the dissolution clause. These |
| Coming up with a solid, detailed plan will allow you to | | | | two clauses cover what happens if and when the |
| easily highlight your goals and the objectives of your | | | | company is wound up and ensure that no profit (in |
| charity. | | | | the normal sense) is made. A charity company |
| Part of this plan should involve choosing a name for | | | | formed in this way is registered with Companies |
| the charity. Much like choosing a name for any other | | | | House and then with the Charity Commission. |
| entity, it's important to choose carefully. You need a | | | | The Charity Commission requires that a charity has |
| name which is clear, unambiguous and will not be | | | | an income of at least £5,000 per annum before it |
| confused with other charities. Offensive names are | | | | will allow registration. Once registered, the company |
| an obvious no-no and you also need to bear in mind | | | | limited by guarantee will be issued with a company |
| that the word "charity" is a sensitive word, which is | | | | registration number and a charity number. It will also |
| prescribed in use. | | | | be governed by company law and charity law. Strict |
| Which Entity? | | | | laws are placed on charities to prevent abuse. |
| One of the main questions posed by those looking | | | | However, the government are keen to encourage |
| for information on how to start a charity is which | | | | charity formation and charitable giving, so there are a |
| legal body is best? There are a few options. A trust | | | | number of benefits to starting a charity. This includes |
| could be established or perhaps a community interest | | | | reduced business rates, no income tax, capital gains |
| company. But the most common choice is a company | | | | tax and special VAT treatments, grants from local |
| limited by guarantee. These kinds of company can be | | | | government, etc. |
| easily adapted to meet the legal requirements placed | | | | For more information on how to start a charity, take |
| on a charitable body by the Charities Act 2006. | | | | a look at our website or contact or specialist charity |
| With a company limited by guarantee, there are no | | | | formation team on 0800 0828 727. |