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CIC v trust v charity v foundation v CIO etc

Which is the best route?

Didn't find your answer?

I literally have no knowledge of this world but I have been asked to be a part of this.

So, I have an aquaintance who runs a successful Ltd company already but who wants to move profits from that Ltd Co (preferably tax free) to some kind of other organisation (listed above, there may be other options) so she can then use those funds to help women set up & launch their own businesses (sorry guys, not my policy) by providing things like training, skills, marketing help, equipment, mentoring, coaching etc . She wants a Board of directors (not trustees) - small, handpicked, she will spearhead - who will each have particular skills in business & who will (eventually) be paid for their time & expertise helping out these other women. 

Does that make sense so far?

I am assuming that the right choice now will save a lot of hassle & heartache & leagl stuff later. So, first of all, we need an expert to help guide us through the minefield of  which set up is best to achieve the outcome she clearly has in mind.  Has anyone any connection or recommendation of such a person please?

Then, once the vehicle is chosen, where I might get training to learn how best to help out covering legal, ethical & professional aspects. 

Thank you!

Replies (7)

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RLI
By lionofludesch
10th Dec 2019 17:18

If they are to be directors rather than trustees, CIC seems to be your only option.

But feel free to explain why they need to be directors.

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By the_drookit_dug
10th Dec 2019 23:42

A CIO must have a minimum of 3 trustees, so she'll have to accept that she won't get unfettered control.

If she wants a board of directors, she could set up a company limited by guarantee then seek charitable status. The Accruals method will be required in drawings up accounts - Receipts and Payments will not be permitted due to Ltd company status.

Regarding training, if you're completely new to charities, the information available for free on the Charity Commission website is as good a place as any to start.

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Replying to the_drookit_dug:
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By the_drookit_dug
11th Dec 2019 00:05

Sorry, just re-read your post - she wants the directors to be paid?

WhichTyler is right, she needs a lawyer - there's too much to consider. Looks like the proposed directors should not really be directors at all, but just hired in expertise i.e. consultants.

If charitable status is to be considered, the governance structure needs to be clearly ironed out.

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By WhichTyler
10th Dec 2019 23:50

Does this successful business person know a good lawyer? That's where I would start

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By alan.rolfe
11th Dec 2019 08:59

Try Bates Wells solicitors -
https://bateswells.co.uk/services/charity/

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RLI
By lionofludesch
11th Dec 2019 09:25

The key issue is whether the consultants need to be paid. If they do, they can't be trustees and the choice is reduced to CIC, which, contrary to popular belief, can be limited by shares.

In any event, I wouldn't be forming a company and then converting to a charity. I'd be forming a CIO from the off, if the charity route was the one you decided to follow. Why complicate stuff ?

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By tracey2412
18th Dec 2019 13:40

Thankyou all for your replies - & I apologise for not responding sooner - I obviously have notification settings turned off & only thought to check back in today.
I don't have any more information without talking to the person who wants to do this but will take your replies when I speak with her again & advise her to speak to an expert - one of her own finding or your recommendations. (If it was me, I would be inclined to start where you good people have pointed.
Again, thank you for your time. I will consider my own involvement carefully given your words of wisdom!

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