I have a client who is trying to determine what type of organisation they are. I have it down to two options a company limited by guarantee or an unincorporated association. The general story is that they run a small gift shop, which has all of the gifts donated. All monies raised are then transferred, in my opinion as a donation, to a company which uses the profit to maintain a railway station. The gift shop itself is at the end of one if the lines.
My question really is, if all of the 'Profit' generated is then paid out as donations, does this mean that here is no profit to disclose? Is the money being paid out classed as a donation?
Does anyone have any thoughts on what type of organisation the would be classed as? They cannot be a charity in their own right because they transfer all of their income to a limited company.
Thanks in advance