Charities play a vital role in addressing issues and implementing change. So choosing the right charity structure is vital. It ensures effective governance and achieving the charity’s aims.
In the legal landscape, there are several charity structures. The most common structures include charitable trusts, charitable incorporated organizations (CIOs) and charitable companies limited by guarantee.
Charitable trusts
This is the traditional form of charity structure. Assets are entrusted to trustees who manage and distribute them for the benefit of the charitable cause. This structure provides a straightforward framework for smaller charities and often involves a clear purpose and a defined group of beneficiaries.
Charitable incorporated organisations and Charitable companies limited by guarantee
These offer a more corporate approach with a separate legal identity. They can shield the trustees from personal liability. Trustees are protected from any financial and legal obligations of the charity. They are exempt from being personally responsible for the organisation’s actions and debts.
Understanding the various charity structures and the role of trustees is important for anyone involved in the charitable sector. The choice of structure should align with the charity’s objectives and activities. And equally important is the commitment of trustees, who act as the guardians of the charity’s goals.
If you’re looking for expert advice on charities, contact Umberto Vietri on 01274 352056 or email umberto.vietri@awbclaw.co.uk.
Read more:
The 5 different types of charity which do you run?
Do you have a liability as a member of a local club or organisation?
Gov UK: the Charity Commission