Charitable trust, ~£250k income p.a., wants to start a business for the purpose of raising funds. Turnover would comfortably fall within the 'small trading' regime. Is there any reason why it shouldn't trade through a partnership?
I regularly read on blogs that charities may not form partnerships, but I think that may be oversimplifying:
- charities can carry on non-primary purpose trade ‘with a view of profit’, and
- a partnership is simply doing that in common with others (per Partnership Act s. 1)
(If the charity can form a partnership, it would probably opt for an LP or LLP to limit exposure.)
Alternatively, as a share in a subsidiary company is in the nature of investment rather than trading, would a share in the capital of an LP (or LLP) qualify as an equivalent?
Any help much appreciated.
(Full disclosure, I'm a charity trustee, not a 'finance professional', and sometimes people on AWeb get grumpy at that. If that applies, please excuse me and pass on to another post.)