Setting Up a Charity – Part II: Get Registered

Starting a new charity is an exciting time to make a positive difference, but the legal side of things can be confusing.

Charities here in the UK are regulated by the Charity Commission. In addition to this, the Charities Act 2011 is one of the main pieces of legislation every charity must adhere to. If you’re confused about  anything, don’t hesitate to reach out to us! 

Whether you’ve just got an idea, or already working in your community, if you’re looking for guidance on how to get your legals right, you’ve come to the right place!

Part I of the series covered how to choose the right legal structure for your charity.

Now that you’ve chosen a legal structure, in this Part II we’ll take you through how to get your charity registered and up and running.

1. Assemble The Team For Your Charity

The constitution of a charity sets out the rules for the organisation.

It is a very important document that covers the charity’s mission, purpose, member’s rights and responsibilities, appointing officers, how to conduct meetings, winding up, and so on.

It’s crucial to ensure the constitution is clear on the purpose and uses the correct wording. In doing so, compliance hurdles are much easier to overcome. 

We highly recommend you seek professional advice if you are unsure about the suitability of the right kind of constitutions for your legal structure – please get in touch with us if you need help drafting your constitution.

2. Hire Trustees 

In order to establish a charity, your organisation will need to have trustees. There are legal requirements that trustees need to be aware of, as well as their rights and responsibilities. Learn more about them here. 

Trustees are often individuals who have willingly offered their time without the promise of any monetary benefit. Yet, they play a crucial role in the success and potential reach of your charity. Therefore, this is one of the most important decisions you will make for your organisation. 

 3. Incorporate your charity

Once you’ve drafted your constitution and hired all the relevant people, the next step is to incorporate the entity with the relevant government body.

It might be a good idea to have a kick-off meeting with the prospective members to discuss the process, organisational structure, and the roles that each member will take. 

The general process will involve the members agreeing on the constitution, filling out the relevant forms, and applying to the government body by paying the relevant fees.

Once you have decided on this, you will need to register your charity with the Charity Commission. It’s important to check the specific regulations for your region, as rules may vary per country. 

If a charity is a Charitable Incorporated Organisation (CIO) or has an annual ‘income’ (this is likely to be in the form of donations) of more than £5, 000, only then will it need to be registered with the Charity Commission. 

4. Register Online

If you are not a CIO, then you can still register your charity online with Companies House. The process can be done online, will require a fee and is the same portal used to register a company. 

The registration will require you to provide some personal information as well as details about your organisation. 

5. Charity Tax Concessions

There are a number of tax concessions available to charities as well as grants and funding. 

Charities are entitled to certain tax benefits. In order to obtain this, they need to be acknowledged by HM Revenue and Customs (HMRC). Your eligibility for these concessions will depend on your legal structure, charitable purpose and the way your constitution is drafted. 

In addition to this, your charity may still be required to pay tax if it used income for purposes that were not charitable or received income that does not count as tax relief. We highly recommend you get professional advice if you’re not sure about anything.

6. Ongoing Charity Reporting

You’ve completed all of the above steps and your charity is up and running. Now, you and your team have the responsibility to make sure that your charity meets all of the corporate governance requirements, including holding AGMs and reporting to the relevant government entity.

The specific reporting requirements will depend on the type of charity structure you have. If you’re after more specific advice on your charity’s reporting requirements, feel free to ask us!

Conclusion

Ready to go? Hopefully this series will help guide you through the legals, so that you can focus on making the most of your charity and giving a voice to your cause.

If there’s anything you’re unclear about, don’t forget that Sprintlaw can help you with your legals as we have expert lawyers that specialise in advising charities and not-for-profits.

If you would like more information about charities and not-for-profits, don’t hesitate to contact us. Feel free to reach out to us at [email protected] or on 08081347754.

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