Trust or Coy Ltd by Guarantee - or what?

This tiny not-for-profit education group wants to formalise its constitution but to what?

Didn't find your answer?

A local group of teachers who train other teachers in the skills of nursery education have been muddling along for a few years.  The group does not have their own bank account or legal vehicle and income and expenses have been run through the bank account of a local nursery school - which has caused a number of issues, not least for the school, whose funding is being cut because the LA thinks that extra funding is part of the school's funding - which it isn't.  The income involved is about £30k p.a. My interest in this is soley that a friend is the nursery school Finance Officer.

At the last meeting, one of the teachers involved suggested they start a Trust.  My friend asked me what I thought.  I don't like the Trust idea for administrative, cost and - I think - tax reasons but thought a Company Ltd by Guarantee would be a better vehicle.

I know this is ridiculous in some ways, (size of entity and giving help for free) but as a profession, I think we should help the community and as you will appreciate, paying for advice is disproportionately expensive for this outfit.

Anyone see any downsides to a Coy Ltd by Guarantee or is a Trust or some other vehicle the best way forward?

Replies (6)

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By Paul Crowley
23rd Nov 2020 14:59

Co ltd by guarantee best route, Also Charity, possibly both
Does anyone get paid?
How does PAYE currently work?
Where does the income come from?

Trust just a load of trouble
Ignore all the other options

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Replying to Paul Crowley:
Library Drinking
By Cambridge Business
23rd Nov 2020 19:08

Thanks Paul,
That was my thought too.

The trainers get paid on invoice so no PAYE - I hope but someone, (me), will have to warn them about IR35.
Income is currently a grant from The Dept. for Education but next year that will come from a University - although they may well just be a conduit for DfE money anyway.
The Charity route is one I had not really examined much but I will look further into that for them.
They are all pre-school teachers and retired teachers, (if you get the meaning), so are not clued up in this at all! I just don't want them to get into a mess, when they need not do so.

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the sea otter
By memyself-eye
23rd Nov 2020 17:08

teachers, muddling along?
Run: far, far away.......as fast as you can.

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Replying to memyself-eye:
Library Drinking
By Cambridge Business
23rd Nov 2020 19:11

If only I could! My friend is not one of the teachers but close to them, so I know that my life would be misery if they got into a pickle.
"We didn't know - why didn't you tell us etc."!

But: point well made and noted!

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Replying to Cambridge Business:
boxfile
By spilly
23rd Nov 2020 22:39

If a charity works out to be the best solution, you could always tell them that you will have to pass it on as it’s a bit specialist/outside of your experience/whatever other excuse springs to mind. It sounds like they will expect you to be doing this pro bono even though they are funded.

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By gillybean04
02nd Dec 2020 14:13

I'm all for helping out the community, and volunteer for different schemes and charities to that end.

But I don't follow your reasoning in this instance. Were they forced to operate as non-profit or was it a choice? Does the non-profit pay earnings to the staff who work for them? Then why can't they find the funds for an accountant who does work for them?

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