Setting up a Charity

Setting up a Charity

Why set up a charity?

A charitable trust can be an effective way to support your chosen cause in a tax-efficient way whilst leaving a lasting legacy as a charitable trust can run indefinitely.

However, the complex legal and regulatory framework governing charities as well as shortages of government funding for charities pose challenges to the setting up of new charities.

Our Private Client team is experienced in setting up charitable trusts from guiding you though the start-up process to helping you decide on the most suitable legal structure, implementing such structure and registering the charity with HMRC and the Charity Commission.

How to set up a charity

The first step is to decide on the purpose of your charity and what it is going to be set up to achieve. The Charities Act dictates that in order to be a charity in England and Wales its purposes must be “charitable”. To qualify as “charitable” you must choose a purpose which falls under one or more of the “descriptions of purposes” listed in the Charities Act and the charity must benefit the public in general or a sufficient section of the public.

Once you have decided on the charity’s purpose, the next step is to decide on its organisational structure. There are a variety of structures that can be used for a charity. The choice of structure will depend on the way in which the charity will be run, the size of the charity and whether the charity will be owning property and/or employing people.

There are four main types of charity structure:

1. a charitable incorporated organisation
2. a charitable company limited by guarantee
3. a charitable trust run by the trustees
4. an unincorporated association operated by trustees appointed by the members of the association

It is important that you choose a structure that is appropriate for your charity that fits with how it will operate. Our Private Client team can guide you on choosing the legal structure which most effectively meets your charities’ objectives and planned operations.

Depending on the choice of structure, your charity will need an appropriate governing document setting out its name, objects, powers, how it will be run, how meetings will be held etc. Our lawyers are highly experienced and able in producing such documents tailored to the specific charity and its objects.

Once you have put in place a governing document for your charity, you will need to ensure that the necessary registrations are completed. We can guide you through the registration processes, to ensure that your charity is successfully registered with both the Charity Commission and Her Majesty’s Revenue and Customs.