[cma-l] Charity limited company

[Cathy Aitchison]

Hi Claire
I'm coming late to the debate and most points have already been well made.
I would also ask you "why?" - would charitable status perhaps enable you 
to access certain funds?

1. Your company Stroud Community Radio Ltd (as the Charity) would keep 
the same name, so there should be no problem with the licence from Ofcom.

2. Your directors would be the trustees - that could be a problem if 
they are employed by the company - check your memorandum and articles of 
association (they can never be paid for being trustees, although if you 
get the wording right in the relevant sections (4 and 5?) they can be 
paid for services to the organisation, subject to a strict procedure 
beforehand.....

3. Also check your objects carefully - however, the Charity Commission 
will discuss them with you and recommend changes if they are not 
charitable enough. Again, as you would be making them more charitable, 
that shouldn't be a problem for Ofcom, especially as in your key 
commitments your Community to be served is "The people of Stroud".

Phrases used as charitable objects include the following:
"To advance the education of the public in radio broadcasting, in 
particular but not exclusively through the provision of training and 
exhibitions" (I imagine you already do training)

"To provide inclusive education, arts and music facilities for [xxx 
town] including a community radio service."

"To advance the education of the public, primarily but not exclusively, 
across the [xxx region] in the appreciation and practice of the arts."

There's a useful section here (it's part of the guidance for setting up 
a new charity, but the Charity Commission will apply the same principles 
to existing companies wanting to register as charities)
http://www.charitycommission.gov.uk/Start_up_a_charity/Guidance_on_registering/Choosing_your_governing_document_index.aspx#purposes

Here is some more guidance on charitable purposes:
http://www.charitycommission.gov.uk/Charity_requirements_guidance/Charity_essentials/Public_benefit/charitable_purposes.aspx

4. I do think it would be useful to tell your contact at Ofcom that 
there are now 3 different kinds of charity (that's not including CICs - 
community interest companies):
a. unincorporated charities, of which there are thousands, often small, 
across the country (presumably the Ofcom person was thinking of these)
b. companies like yours (limited by guarantee) which were also 
registered as charities - on setting up or later (London Link Radio and 
Women's Radio Group are two examples of those which registered later, 
although neither have licences, so no help re. Ofcom)
c. the new Charitable Incorporated Organisation, which is halfway 
between the existing two - see
http://www.charity-commission.gov.uk/start_up_a_charity/do_i_need_to_register/cios/default.aspx?
The information is dated today, 11th Sept, and it warns that there may 
be changes to the guidance - however, it includes info on how a 
charitable company can convert to a CIO, so worth a look. Under "How 
does an existing charitable company convert to a CIO?" it specifically says:
"Although the regulations have not been made yet, we know from the 
Charities Act 2006 that the process will be relatively straightforward. 
The existing corporate body will simply be re-registered as a CIO with a 
new constitution. The conversion process will not affect the legal 
personality of the organisation or its business relationships."

So that could be good news, although what with CICs, and now CIOs, they 
don't make it easy to follow, do they :)

Good luck
Regards
Cathy Aitchison
-----------

On 10/09/2011 09:33
claire penketh wrote:

>  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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