Charitable Status for WOBYC?

Should WOBYC relinquish “Ltd” and work towards “CHARITABLE” Status?
The Charities Act 2006 recognises the 'advancement of amateur sport’ as a charitable purpose; thus charitable status is open to sports clubs provided they can meet the conditions laid down in the Act.
The range of benefits available to a charity are wider than those available under the CASC scheme.  However, the trade off for this was that historically (at least) charities were more regulated than CASCs (although with the proposed changes to the CASC scheme this distinction may no longer be so evident).   (The “CASC” scheme closed in April 2016, but is included for information within some links).

Charities are regulated by the Charity Commission and if WOBYC takes on this status it will be necessary to ensure that the club complies with charity law.

 

Related Links:
•         Charitable Status
•         Pros and Cons of Charitable Status
•         Tax Comparison - Charity CASC [but remember CASC has closed; remainder of this information table is still valid].

If requiring further assistance please contact the Legal Team
Tel:  023 8060 4223 Email: legal@rya.org.uk.

There are four main legal forms for charities:

Title

 

+  Advantages  +

  Disadvantages 

Trust

(Deed  or  Will)

Trust

  • Simple & inexpensive to set up
  • Simple Receipts-&-Payments accounts
  • One regulator- the Charity Commission
  • No protection from liability for the Trustees
  • Cannot have members with a formal role in governance
  • No legal personality of its own and therefore contracts are entered into by the Trustees.

Unincorporated Association

(Constitution or Rules)

UA

  • Simple and inexpensive to set up
  • Simple Receipts-&-Payments accounts
  • Can have members who have a formal role in governance
  • One regulator- the Charity Commission
  • No protection from liability for the Trustees
  • No legal personality of its own and therefore contracts are entered into by the Trustees.

Charitable Incorporated Organisation

(Articles of Association)

CIO

  • Simple Receipts-&-Payments accounts (if gross income <£250k p.a.)
  • Trustees have nil or limited liability for the debts
  • Can have members who have a formal role in governance
  • Has its own legal personality and can enter into contracts in its own right
  • One regulator- the Charity Commission.
  • Must use Accruals accounting (if gross annual income  >£250,000 p.a.)
  • New form of governance, therefore not yet tested (a CIO does not come into existence until it is registered by the Charity Commission)
  • There is no register of charges for a CIO as there is for a company.

Company Limited by Guarantee

(Constitution)

CLG

  • Trustees (Directors) have limited liability for contractual liabilities
  • Can have members who have a formal role in governance
  • Has its own legal personality and can enter into contracts in its own right
  • Better option if charity is likely to want to issue debentures (or bonds).
  • More complicated and/or expensive to operate - a CLG does not come into existence until it is registered by Companies House and needs subsequently to be registered by the Charity Commission
  • Must use Accruals accounting no matter how much income it receives
  • Two regulators- the Charity Commission & Companies House.