[cma-l] Charity/Limited Company - or what?

[Ian Hickling]

I think the best move it simply to itemise the benefits and liabilities.
The Licence must be held by a Non-for-Profit organisation, which can be a Community Interest Company, a Registered Charity or a Company Limited by Guarantee - and there are two other formats I believe.
A CIC is the most flexible and an RC is the most restricted.
If you are either of these, there is nothing at all to stop you having a separate Limited Company which can operate conventionally and be VAT registered - which I heartily recommend as vital to any normal trading organisation.
If you have Charitable Status, it is so much easier to get funding from large organisations and other Charities, but you won't usually be able to reclaim VAT on that funding - which will mean you effectively lose 16,6% of everything you spend.
Not good!
So use the commercial Limited Company to fund the CIC and look after its tax and debts - and the Charity/Charitable Arm to source and feed it lumps of direct funding.
One reasonably bright person can look after all the accounting, which should take no more than two working days a month.


------------------------------------
Ian Hickling
Partner


 




To: tlr at gairloch.co.uk; cma-l at commedia.org.uk
From: tlr at gairloch.co.uk
Date: Sun, 11 Sep 2011 15:03:58 +0100
Subject: Re: [cma-l] Charity limited company

Just noticed accidentally set my reply yesterday only to Claire. So here it is for what it's worth (?) 

Alex
----- Reply message -----
From: "Two Lochs Radio" <tlr at gairloch.co.uk>
Date: Sat, Sep 10, 2011 13:42
Subject: Re: [cma-l] Charity limited company
To: "claire penketh" <clairepenketh at yahoo.co.uk>

I'm not a company lawyer, but think the most usual arrangement would be to keep the limited company for all the existing 'business' purposes, and set up the charity to fundraise for charitable purposes that it would pursue through support of the radio station.

You would in any case have to establish the charity for wider community benefit, because running a radio station (even a community one) is not accepted as a valid charitable object in itself, only as a possible means to a wider charitable objective such as education, relief poverty etc.

Alex

Alex
----- Reply message -----
From: "claire penketh" <clairepenketh at yahoo.co.uk>
Date: Sat, Sep 10, 2011 09:33
Subject: [cma-l] Charity limited company
To: "&apos;cma-l&apos;" <cma-l at commedia.org.uk>



 Stroud FM, currently a company limited by guarantee, is thinking about becoming a charity limited company. Had a quick chat with OFCOM re implications for our licence, which is held in the name of Stroud Community Radio Limited and they said that we will have to keep the current ltd company and set up the charity alongside, because the charity isn't a body coperate. Then they suggesed I ask the CMA what other members do, so here I am. However, I think a charity limited company is a body corporate? But, if the licence is held by Stroud community Radio limited, does that mean we still have to keep the company, or could the licence be transferred to the charity limited company?
 
Yours, confused.

 
 Claire Penketh, Stroud FM
 
 


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