We assist individuals with the formation of not-for-profit organisations, including charities and foundations, and help with the registration process for other incorporated bodies, ongoing governance, and advising on general legal issues. Our goal is to imbue our clients’ first steps into the not-for-profit sector with a sense of security and readiness. We cover the updating of constitutional documentation and the closing down of entities that are no longer required.
Charity & Not-for-profit
Herrington Carmichael is a full service law firm offering legal advice to UK and international businesses as well as individuals and families.
Charitable Organisations
Our Charities and Not-for-profit Team can guide you through the process of setting up and managing a Charitable Incorporated Organisation ("CIO").
What is a Charitable Incorporated Organisation?
A CIO is a charity that has its own legal identity and comes into existence as soon as it is registered at the Charity Commission. A CIO must have trustees who manage the organisation.
What is a Foundation and Association Model CIO?
A CIO can choose between two different structures; the foundation or association models. What differentiates these two models is their management structure. In foundation model CIOs, trustees and members are the same people, whereas association model CIOs leave membership open to non-trustees.
What do our Services Include?
Our expertise extends to:
- Formulating your mission statement.
- Defining your charitable objects.
- Drafting the constitution.
- Ongoing governance assistance.
Community Amateur Sports Club
If you have a sports club based in the UK, and satisfy the conditions listed below, our Charities and Not-for-profit team can help your club register as a Community Amateur Sports Club (CASC).
What is a CASC?
Introduced in 2002, a CASC is a registerable status granted to sports clubs which satisfy a set of qualifying conditions. Once a club registers as a CASC, they are exempt from certain tax requirements, such as tax on trading profits (if the club's income is below £50,000). They are not companies and are registered with HMRC.
Qualifying Conditions:
- The club is open to the whole community
- Its membership costs are limited to a specified amount
- It's organised on an amateur basis
- Its main purpose is for the provision, promotion or participation in one or more eligible sports
- The club's income limit is not exceeded
- It meets location requirements
- Meets the management condition
- The club is non-profit making, and any surplus turnover is reinvested into the club.
Unincorporated Charities
What is an Unincorporated Charity?
An unincorporated charity is simply an individual or group of people operating as a not-for-profit organisation under the same name for a legally valid charitable purpose. Since these associations are unincorporated, they are not treated by the law as legal individuals. This means that the association's members do not benefit from limited liability, rendering them personally liable to the charity's financial obligations.
Our Services:
Our Charities Team deliver advise in a bespoke manner, and can help your unincorporated association acquire charitable status, by:
- Identifying your charitable purposes and whether they are for the public benefit
- Defining your mission statement
- Helping you comply with statutory and regulatory requirements
- Advising on alternative legal structures that meet your individual needs
Charitable Foundations
What are Charitable Foundations?
A charitable foundation is simply a charity that is funded by one individual or legal entity. Corporate Foundations specifically refer to foundations that are funded by a single corporate entity, such as a company or limited liability partnership.
Our Service:
- Setup your charity and advise on appropriate legal structures.
- Assist with identifying your charitable purpose
- Define your mission statement.
- Help you comply with statutory formalities.
Charitable Companies
Charitable Companies are a common legal structure for running a charity. They offer the same benefits as a company and are regulated by both charity and company law.
What is a Charitable Company?
A Charitable Company is an incorporated body registered as a charity at Companies House. As a corporate body, your charity is legally considered a person in the same way as an ordinary individual. This enables your charity to engage with legal matters in its own name, such as: employing staff, entering contractual agreements, and owning land and assets. Charitable Companies can only be limited by guarantee, which means they have no shareholders, only members who agree to contribute a pre-determined amount in the event of the charity being wound up (the guarantee).
Our core charity services
We deliver work that meets each client's needs in a bespoke manner and offer legal support on an ad hoc basis. Our services include:
- Defining your charitable objects and mission statement.
- Assistance with attaining registered status.
- Ongoing governance support as required pre- and post-incorporation.
- Maintaining your statutory registers in electronic form.
- Handling all requisite filings.
- Your charity's first board minute.
Charity Structure
Choosing the correct structure for your charity depends on your aims, we can help you decide which structure is right for you.
Are your aims exclusively charitable?
I.e., not just for the benefit of the community? And, if so, does that purpose provide a public benefit? It's important to understand what constitutes an exclusively charitable purpose.
Once you've established your charitable purpose, consider this:
Does a charity already exist that shares the same aims, benefits the same group of people, and operates in a similar location?
If you answered 'Yes', collaboration would be a better approach. Working together prevents charities from competing for resources and funding, allowing them to better serve their beneficiaries.
Are you aware of restrictions and Charity Compliance?
Being classed as a charity will restrict your activities and you should therefore ensure that the restrictions will not adversely affect your aims.
Charity Disputes
Our Dispute Resolution lawyers cover a full range of disputes from the complex and high value to the more modest. We represent clients in court, arbitration tribunals and use alternative procedures, including mediation, to resolve disputes.
Our Dispute Resolution team can support you with:
- Business Disputes
- Contract Disputes
- Data Protection Breach
- Land & Property Disputes
- Intellectual Property Disputes
- Professional Negligence
- Debt Recovery
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Frequently Asked Questions
Find answers to your most pressing questions about our services and processes.
How much does it cost to set up charity?
Registration of charities with the Charities Commission or other relevant regulatory bodies is a complex process and takes time, however, we can assist you with an initial review of what route you should take and what considerations you should be taking.
What does Charity Compliance / Charity Governance Involve?
Governance and Secretarial – This will be at the heart of reputational compliance providing a robust governance framework, management of risk and impactful resource management.
This involves supporting trustees in understanding their roles, responsibilities and duties.
Employment – Staff and volunteers are some of your key assets, the external face of the charity, which is why we will support you with developing your policies on human resources, recruitment, pensions, conduct and disciplinary issues.
Commercial – We can assist with all aspects of contracts and agreements or new vendor or outsourcing arrangements.
Property – there may be instances where land or property transfers are required, or terms of use need to be negotiated.
Regulation – As you grow, we can help you manage relationships with the regulators.
Growth – Depending on how quickly you envisage this happening, we can engage with you in your fundraising effort.
What is a Charitable Incorporated Organisation?
A CIO is a charity that has its own legal identity and comes into existence as soon as it is registered at the Charity Commission. A CIO must have trustees who manage the organization.
What is an Unincorporated Charity?
An unincorporated charity is simply an individual or group of people operating as a not-for-profit organisation under the same name for a legally valid charitable purpose. Since these associations are unincorporated, they are not treated by the law as legal individuals. This means that the association’s members do not benefit from limited liability, rendering them personally liable to the charity’s financial obligations.
What is a Charitable Company?
A Charitable Company is an incorporated body registered as a charity at Companies House. As a corporate body, your charity is legally considered a person in the same way as an ordinary individual.
Who is eligible to be a trustee?
A charity trustee must be at least 18 years of age (unless the charity is a company or a charitable incorporated organisation when the minimum age is 16). You can not be a Trustee if you are disqualified unless you receive a waiver from the Charity Commission. Non-UK residents and non-British citizens can be appointed as Trustees as long as they meet the eligibility criteria and the Charity’s governing document does not restrict the residential status of your trustees. If the charity is going to work with children and/or vulnerable adults, disclosure and barring service checks will need to be undertaken where appropriate.
I want to start up a charity, what do I need to consider first?
Firstly, you need to consider whether setting up a charity will actually achieve your aims. Consider whether your aims are exclusively “charitable” and provide a public benefit, whether a charity with the same aims already exists (in which case collaboration may be better), and whether the restrictions of being a charity will adversely affect what you wish to do. If you decide to proceed, you should aim to have at least three trustees appointed who are unconnected to each other with a good range of skills.
What are the alternatives to setting up a charity?
If a charity may not be the right choice for you, consider a Social Enterprise (a business with social, environmental or community objectives that doesn’t meet the “charitable purposes” test), setting up a named fund or trust through a community foundation, or a Charities Aid Foundation (CAF) charitable trust if you have more than £10,000 to donate.
What are the 13 categories of charitable purposes as set out within the Charities Act 2011?
- The prevention or relief of poverty.
- The advancement of education.
- The advancement of religion.
- The advancement of health or the saving of lives.
- The advancement of citizenship or community development.
- The advancement of the arts, culture, heritage or science.
- The advancement of amateur sport.
- The advancement of human rights, conflict resolution or reconciliation or the promotion of religious or racial harmony or equality and diversity.
- The advancement of environmental protection or improvement.
- The relief of those in need, by reason of youth, age, ill-health, disability, financial hardship or other disadvantage.
- The advancement of animal welfare.
- The promotion of the efficiency of the armed forces of the Crown, or of the efficiency of the police, fire and rescue services or ambulance services.
- Any other charitable purpose!