In order to get your project going you will probably need a group of people to share the work involved, this could either be a group which is already set up carrying out activities which fit in with your project or a totally new group.
Either way it is important that you have a clear idea of what you want to achieve. This can be written down in a constitution.
Constitution
When bringing together a community group its important to ensure that everyone in the group agrees on the groups objectives, which members are going to perform what tasks and that the groups finances are well managed. This can all be detailed in a governing document the simplest form of which is a constitution.
A constitution contains the following information
- What the organisation is set up to do (objects)
- How the organisation will do these things (powers)
- Who will run the organisation (committee)
- How they will run it
- Internal arrangements for meetings voting, looking after money
- What happens if changes to the constitution need to be made
- What happens if the organisation wants to wind up
Once you have written your constitution it must be formally adopted by the groups members.
An organisation governed by a constitution has the most simple form of legal structure and is know as an ‘Unincorporated Association’.
NAVCA, the Charity Commission and many other third sector organisations have developed a small charities constitution. The new constitution is designed to provide a concise, practical framework for charities with an income of under £5,000. It uses clear, direct language that is easy to understand, is only 700 words long and covers all the requirements for a very small charity which does not own land or employ staff. For more information please visit the NAVCA Website.
Other Forms of Legal Structure
Depending on the size and nature of your organisation two other forms of legal structure may be appropriate these are Charitable Trusts or Companies Limited by Guarantee.
Charitable Trusts
A Charitable Trust is usually set up to manage money or property for charitable purposes.
Its governing document is a Trust Deed, which must be registered with the Charities Commission.
Charitable Trusts may receive rate relief on buildings which are used for charitable purposes, many funders only award funding to organisations which are Charitable Trusts.
Being a Charity restricts the type of activities the organisation can take part in including restrictions on trading activities.
A Charitable Trust cannot own land or sign legal documents in its own name, instead individuals must sign legal documents on behalf of the trust.
Charitable trusts are governed by Charitable law and must submit copies of their annual accounts to the Charities Commission.
Further information about setting up charities can be viewed on The Charity Commission website.
Companies Limited by Guarantee
Companies Limited by Guarantee are usually larger organisations which employ staff and engage in trading activities.
Their governing document is the Memorandum and Articles of Association, which must be registered with Companies House. A company can own land and sign legal documents in its own name and does not have as many constraints on its activities as a charity.
Being a ‘limited’ company means that directors are generally not personally liable for debts if things go wrong.
Companies are subject to company law and must submit copies of their annual accounts to the Registrar of Companies. Companies can also register as a charity thereby becoming a charitable company.
Further information about setting up a company limited by guarantee can be viewed on the Business Link website.