A client has got involved in running a local free newspaper for which he and others submit articles. The paper is financed by selling advertising space, none of the contributors receive any payment. He is, however, concerned about the legal structure of this enterprise. It is simply a group of friends getting together to produce and distribute the paper: there is no constitution and no (as far as they are aware) legal entity (company, club, partnership, etc.), although it does have its own bank account. The amount of money involved is tiny (c£3,000 per annum), so they don't want to have to start producing accounts, filing tax returns, etc.
His concerns are:
(i) Should there be some form of legal entity, and if so, what? Or is one already implicit in the organisation?
(ii) Are there any tax issues? There is always some spare cash in the bank account, so, although a not-for-profit organisation, there could be said to be a surplus most years.
(iii) Although more of a legal than accounting issue, is there any collective liability (e.g. if an article could be deemed defamatory)?
Any thoughts/ideas/ help would be very gratefully received.