What type of company would be best to start a charity?

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Hi, I’m part of a local group that would like to set up a charity in memory of a local boy who recently passed away of leukemia. What type of company would suit a charity? Is there one particular structure we should follow?

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That’s a great thing to do, I wish you all the very best with this endeavour.

In terms of company structure, I would recommend setting up a private company limited by guarantee. This is the best type of company for non-profit ventures and charities because it does not have any shares or shareholders.

You will simply appoint one or more people to act as guarantors. At least one director will also be required. The same person (or people) can be both a guarantor and director.

Any income you receive will be used to achieve your non-profit aims, so you will not distribute any profits to the guarantors. You must abide by this rule otherwise you will not be eligible for charity status.

You will also have to register with the Charity Commission (England and Wales), the Office of the Scottish Charity Regulator (OSCR) or the Charity Commission for Northern Ireland.

If you wish to include the word charity in your company name, you will have to first register as a charity and provide proof of your organisation’s status for Companies House when you complete your company formation application form.

To find out more about setting up a charity, please click here.

10 months ago
 

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