This is our most popular package with UK residents, and includes: Submission of applications that details company's executive officers Guarantee company formation is usually achieved within 6-8 workday hours (Companies House permitting) Payment of UK legal and initiation fees The appointment of your own candidates as directors and secretary (a minimum of two people are required) The following documents will be e-mailed to you (Note: these documents are to be printed and signed): Electronic Certificate of Incorporation (PDF) Electronic Special Memorandum & Articles of Association (MS Word) Minutes of the First Meeting of Directors (MS Word) Membership Certificates and company Register
Economy Package
£ 92.00
Renewal fees from £50.00
This is our most popular package with EU residents, and includes: Submission of applications that details company's executive officers Company limited by guarantee formation is usually achieved within 6-8 workday hours (Companies House permitting) Payment of UK legal and initiation fees The appointment of your own candidates as directors and secretary (a minimum of two people are required) A registered office address for 12 months, provided by Coddan An application form for the following year's renewal of the Registered Office Address service (£50.00) Annual Return and Annual Account reminder The following documents will be e-mailed to you (Note: these documents are to be printed and signed): Electronic Certificate of Incorporation (PDF) Electronic Special Memorandum & Articles of Association (MS Word) Minutes of the First Meeting of Directors (MS Word) Membership Certificates and company Register
Premier Package
£ 141.95
Renewal fees from £99.95
This is our most popular package with small business, and includes: Submission of applications that details company's executive director Non-profit company registration is usually achieved within 6-8 workday hours (Companies House permitting) Payment of UK legal and initiation fees Applicant appointment of director for company (appointed electronically) A registered office address for 12 months, provided by Coddan An application form for the following year's renewal of the Registered Office Address service (£50.00) Nominee company secretarial service for 12 months (next year - £49.95) The following documents will be posted to you (these documents will be sent via Royal Mail): The original laminated Certificate of Incorporation A bound copy of the Memorandum and Articles of Association The Minutes of the First Directors' Meeting One (minimum) printed Membership Certificates and Company Register
Deluxe Package
£ 266.95
Renewal fees from £224.95
This is our most popular package with overseas residents, and includes: Non-profit company incorporation is usually achieved within 6-8 workday hours (Companies House permitting) Payment of UK legal and initiation fees A registered office address for 12 months, provided by Coddan An application form for the following year's renewal of the Registered Office Address service (£50.00) Nominee company secretary service for 12 months (next year - £49.95) Coddan provides a company nominee director service for 1 year (next year - £125.00) The name of the nominee director & secretary will appear as a public record Annual Return and Annual Account reminder The following two hard bound copies of corporate documents will be posted to you (Note: these documents are sent to you through Royal Mail Service, and are to be completed upon arrival): The original laminated Certificate of Incorporation A bound copy of the Memorandum and Articles of Association The Minutes of the First Directors' Meeting One (minimum) printed Membership Certificates and Company Register A pre-signed, undated letter of resignation from the nominee director A General Power of Attorney signed by nominee director An indemnity Letter for General Power of Attorney A nominee service agreement which provides for the indemnification of the nominees
Business Start-Up: Legal Requirements
A guarantee company does not have a share capital. A guarantee company has Members. Members are guarantors instead of Shareholders. A guarantee company can hold property. A guarantee company can borrow money in its own name. Guarantee companies are required to have a secretary. Secretary usually described as the senior administrator. This person may also be a member or director, but need not be. A company must have a minimum of one Member. Members can be corporate bodies or private individuals. Members can be of any nationality. The company is required to have a registered office in the UK.
ESTABLISH A CHARITABLE COMPANY. CHARITABLE COMPANIES INCORPORATION
A charitable company is normally incorporated for non-profit making functions. The company has no share capital. A charitable company has members, rather than shareholders, the members of the charitable company guarantee/undertake to contribute a predetermined sum to the liabilities of the company which becomes due in the event of the company being wound up. We specialise in incorporating British companies limited by guarantee.
If you are considering registering UK company limited by guarantee or if you would like any information regarding English companies limited by guarantee we will be pleased to assist you. If you want to become familiar with the description and the contents of UK non-profit company formation packages, offered by Coddan and to find above, what kind of service is included in this or that British guarantee company incorporation package, to get an idea about the price of annual renewal of the service, and about the general legal requirements to the English guarantee company incorporation, please, select the package you need from the list, situated below the banner. The information in the banner will be renewed according to the package you've chosen.
Important Links
Our fee for registering a company limited by guarantee is ONLY £42.00. This type of company is normally incorporated for non-profit making functions. The company has no share capital. Common uses of guarantee companies include clubs, membership organisations, sports associations and charities. When first setting-up a business there are many issues to consider. You need to decide whether or not to incorporate your business, and to choose a structure for your business. There are several types of legal business entities which you can choose to operate as. For more information on these choices, follow the links below. We advise that professional legal and financial advice is obtained before a final choice of business entity is made.
Coddan is a leading service provider in the field of English, Scottish and Irish company formation and company registration. We can help you in starting a business in England, Wales Scotland & Northern Ireland. Over 95% of our companies are incorporated within 4-8 hours. The electronic submission of information enables a fast company start-up satisfying all of the required legal formalities: a director, a secretary, a registered office and shareholders. Our electronic filing software has been approved by Companies House.
Suggested Reading
Live Help: Live Help is a real time "chat" feature which enables you to interact with a customer service representative without a phone call. Get answers to your questions while using our website. Clicking the "Live Help" button will start an on-line session with one of our representatives. Live Help is currently available during normal business hours. Outside of the above opening hours, our business center will be closed. When you click on the button, you will see an e-mail form that will allow you to send us a mail with your questions. Live Help is free! There are no hidden fees. We offer the service as a courtesy to our website visitors.
Dear visitors, while having a chat session with a customer, we are frequently requested to give a piece of advice on tax planning or business structuring. We would like to inform you that it is against our principles to provide online advice pertaining to these issues. The points that may be covered during a session include service description, package or service price, navigation at our website, ways of making an order, methods of payment etc. Yet, if you wish us to provide you with advice on tax or business structuring, you should be aware that this service is chargeable.
WHAT IS A UK CHARITY?
What is a charity? In practice, nowadays, the charity is either going to be a trust or it is going to be a corporation. It has to be established for charitable purposes. You could set up a charity for genuinely philanthropic means. There are indirect advantages of charities; they can perhaps buy you knighthoods or the equivalent in your own country. One huge advantage of the charity is that it enables you, as charitable trustee, to retain control of assets, for example, voting control of shares in a company without the beneficial ownership attached to them, which could have adverse tax consequences. It can give you an enormous amount of patronage and, once you have got beyond a certain amount of wealth, there might be a great deal to be said for putting a substantial amount into a charitable trust of which you are the first-named trustee which gives you control of that empire without any related taxes or tax problems.
The principal benefits of charitable status are tax-related. Special advantageous reliefs and schemes concerning Income Tax, Corporation Tax, Council Tax/Rates and others are available to recognised charities. Charities do pay VAT although there are exemptions available for various activities. Charitable status is beneficial to fundraising. Many grant-giving trusts and foundations can only give funding to recognised charities. "Charity" is a very emotive word and can be very persuasive in encouraging the general public to donate in a variety of ways. But your immediate question might be: "Why bother going to the UK? There are lots of tax havens and zero-tax jurisdictions". The short answer is because, unlike most tax havens, the UK has a very widespread network of treaties and the use of a UK charity can enable you to avoid withholding and other taxes on source income in many other countries throughout the world which you would not be able to do if you had a charity, say, resident in BVI. That is really the key to it.
A United Kingdom charity enjoys enormous UK fiscal privileges. It is in general exempt from: taxes on income, except trading income. Taxes on capital gains. Taxes on gifts, estates and trusts (inheritance tax); and stamp duty on conveyances to the charity.
WHAT ARE CHARITABLE PURPOSES IN ENGLISH LAW?
What are charitable purposes in English law? These are very wide indeed. There is a traditional classification, which falls into four parts. The overriding requirement is that, in principle, charitable purposes should always be for the public benefit (that is perhaps eroded in some cases). The traditional fourfold distinction was between charities for the relief of the aged, impotent and infirm (basically the poor and those medically disadvantaged); charities for the furtherance of religion; educational charities and then a fourth head. And this fourth head has expanded over the years and now includes many cultural matters.
One of the important points is to what extent can a UK charity have extra-territorial activities? As far as the first three heads are concerned there is no problem at all: the UK charity can spend all its money abroad on the relief of poverty, the furtherance of religion, education, research, etc.
Sometimes certain trusts, particularly trusts for the relief of poverty, need not be for the benefit of the public in general. They can be for quite narrowly defined classes of persons, such as the employees or former employees of a particular employer or their dependants. And building up a charitable trust fund here can actually be quite a useful way for an employer to remunerate its poorer employees and further its own business in a tax-efficient way, by holding assets in a tax-free fund.
SHOULD ONE HAVE A CHARITABLE TRUST OR A CHARITABLE CORPORATION?
Should one have a charitable trust or a charitable corporation? Many of the relevant criteria here are nothing to do with tax at all. Each can be established very freely; you do not need any state consent. What you do need to do is to register with the Charity Commissioners and they will inspect your trust deed or the statutes of your company to make sure that your objects are in fact charitable.
The Charity Commissioners are very important because once they have certified that your objects are charitable and that you are a charity this then binds the whole world including the Commissioners of Inland Revenue. The latter cannot then argue that you are not charitable, you automatically get your tax exemptions and if they disagree they have got to take proceedings (which are actually very rare) to have you struck off the register.
Charitable trusts are like any other trust except, of course, they do not have beneficiaries. If there are no beneficiaries, who enforces them? In theory, the Attorney-General or the Charity Commissioners can step in if there is a breach of trust. You avoid the problems, which can arise in the case of a private trust, where you can have members of the family coming along and complaining that the £ 1m. the trustees have given them this year isn’t enough. So to that extent being a charitable trustee should be easier. Another big advantage of charitable trusts is that they are not subject to the rules against perpetuities; they can last forever.
Charitable corporations are very similar to other corporations. They can - and often do - have members, like shareholders, but the big distinction is that the members cannot take any benefits. No dividends can be paid to them; the funds of the charitable corporation must be applied for charitable purposes only and if it is wound up, eventually, the funds cannot be distributed to the members and must be transferred to another charity.
CHARITY IS EXEMPT FROM UK TAXES
UK Companies Limited by Guarantee from only £42.00! All Inclusive Company Registration. Each company limited by guarantee package includes all statutory paperwork and is fully compliant with company law. A Certificate of Incorporation, and the Memorandum and Articles of Association of your company will be sent to you upon formation of your company. You can appoint your own directors and secretary BEFORE company incorporation. This is absolutely FREE. Our 4-8 hour online incorporation service enables you to register your company quickly and effortlessly. All government and filing fees are included in the cost of our E-Quick pack. All certificates and documents will be sent directly to you via email immediately following the formation of your company. It will take just 5 minutes to complete the online registration form, then your company could be up and running within 4-8 working hours.
THE E-QUICK PACKAGE CAN BE UPGRADED WITH ANY OF THE FOLLOWING FEATURES:
1. Company Pliers Seal - £20.00. 2. Laminated Hard-copy of the Certificate of Incorporation - £5.95. 3. Laminated Hard-copy of the Certificate of Incorporation, Bound Copies of the Memorandum & Articles, and Combined Company Register - £12.95. 4. Domain Name Registration for two years - £16.00. 5. Provision of a Registered Office Address for 12 months - £50.00. 6. Provision of a Nominee Company Secretary for 12 months - £49.95. 7. Certificate of Good Standing - £35.00. 8. Notarisation & Apostille of Documents.
UK charity is exempt from UK taxes. It is exempt from taxes on income except trading income, but even there, there is a well-known device which is - as it were - approved by the Charity Commissioners and the Commissioners of Inland Revenue whereby it can even escape tax on its trading income. It simply incorporates a trading subsidiary and the trading subsidiary gifts all its profits to the parent charity and that way there is no tax. There is in general no tax on capital gains, no tax on gifts, estates, trusts, no stamp duty or stamp duty reserve tax. The only tax that charities in the UK have to pay is value added tax and that, of course, is because value added tax is not a British tax: it is a European tax and the rules are fixed by the EC. So in general charities have very few exemptions from value added tax.
Gifts to charities can be extremely tax effective but this, of course, is only of interest if you are a person who would otherwise be a UK taxpayer.
Whether you have a charitable trust or whether you have a charitable corporation does not, in general, matter unless that is, the charity becomes insolvent, and then it is very important indeed. If it is a corporation the rule of limited liability will normally apply. If it is a charitable trust then the trustees will be personally liable up to the hilt whether there are sufficient assets or not. That might be a big consideration if you are going to be one of the trustees or directors.
Where the difference does matter is when it comes to international tax and to double taxation treaties and arrangements. Double taxation treaties do not tend to make express reference to charity. They do make references, sometimes, to trusts; they always, of course, make references to corporations and one has to apply each individual treaty and see how it fits in with the charities. Although, in principle, there is no reason why a charitable trust should be taxed differently from a charitable company, you might find that under double tax treaties, they often are. The solution here, if you appreciate that there may be a problem, is to look at the double tax treaty in question and see whether it is better to have a UK charity which is a trust or a UK charity which is a company. If appropriate in your circumstances, you can have two sister charities: one a trust, one a company and you use the appropriate one to get the maximum treaty relief with the other State. There is no problem at all transferring funds from one charity to another within the UK - there is no tax on that - so in effect you have got a sort of group.
DOUBLE TAX TREATIES
Under OECD Article 4.1 "Resident of a Contracting State" means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management or any other criteria of a similar nature. "Person" is partially defined by Article 3.1 to include "an individual, a corporation and any other body of persons". A charitable corporation is thus a resident of the United Kingdom. A charitable trust is almost certainly a "body of persons" and is therefore also a resident of the United Kingdom.
If one looks at the OECD Model, a question one might ask is: Given that a UK charity pays no UK tax, is it right that it should be exempt from foreign tax? As far as the OECD Model is concerned, the answer is: yes, it makes no difference at all. There are one or two points in the Model that one needs to watch. There are some Articles, which require the UK resident to be the beneficial owner of, say, the income in question in order to obtain the treaty relief. There is no problem with a corporation, but with charitable trustees one would not, as a matter of English law, say that they are the beneficial owners.
If one turns to the UK-German treaty, here one finds a degree of sophistication. One looks at Article 6 (1) (Dividends): "Dividends paid by a company resident in one of the territories to a resident of the other territory may also be taxed in the former territory. Tax shall not, however, be charged in that former territory at a rate in excess of 15 per cent on the gross amount of such dividends provided that those dividends are subject to tax in the other territory."
So if you have a UK charity owning shares in a Germany company which declares a dividend, can it take advantage of this 15% ceiling? There must be an argument that as it is exempt from tax in the UK those dividends are not subject to tax so it cannot.
To avoid any argument, there is a simple way round this: the UK charity incorporates a wholly-owned UK company, that UK company owns the shares in the German company; the UK company receives the dividend; it is itself subject to tax on that dividend. As it happens, at the end of the day it does not pay any tax, and the reason is that it is going to make a payment of its profits to its parent for charity and that payment is going to be wholly deductible in computing its UK corporation tax liability. So, whenever you have got a problem of this type, that, to our mind, is a solution, it is easily done and you will not have any problems in the UK from that.
UK - USA Treaty: The treaty between the UK and the USA is entirely specific on the question of trusts, which are expressly stated to be within the definition of "person": see Article 3 (1)(c). A trust resident in the United Kingdom for the purposes of United Kingdom tax is a "resident of the United Kingdom": Article 4 (1) (a) (i).
A corporation is only a resident of the "United Kingdom" if its "business management and control is in the United Kingdom". It would thus be highly abnormal for a UK corporate charity not to be a "resident of the United Kingdom" for the purposes of this treaty.
CHARITIES ANNUAL RETURN
All charities must file a charities annual return and their full annual accounts and reports with the Charity Commission within 10 months of the close of their financial year (unless their gross income or total expenditure is less than £ 10,000 per annum). In addition, an incorporated charity must also file its company annual return each year (made up to the anniversary of incorporation) as well as submitting its annual accounts and reports to Companies House. Charities which persistently default can now expect to see their names published on the Charity Commission website and an increasing number of inquiries are being opened into defaulting charities – with the results also made publicly available. In addition, late filing penalties will be imposed if accounts are filed late at Companies House and the directors/trustees risk criminal prosecution under company law and even disqualification as directors/trustees for unfitness or persistent default.
The Charity Commission's enhanced visits programme is being doubled in numbers to target 600 charities this year. Particular attention is being paid to medium sized charities with incomes between £ 250,000 and £ 10 million and to charities where the Commission's monitoring of annual returns and accounts has noted a "trigger" factor, such as apparently unauthorised payments to trustees. However other charities are being selected on a purely random basis. A formal agenda is drawn up prior to the visit and a mix of senior staff and trustees are expected to attend the meeting, normally on the charity's own premises, which the Commission warns may last all day in complex cases. A written report will be provided to the charity afterwards, highlighting legal and regulatory matters with which the trustees must comply, noting examples of existing good practice and suggesting areas where additional good practice standards might be adopted by the charity.
CHARITY GUIDANCE
Revised guidance on the extent to which sporting activities might be charitable is now available from the Charity Commission. This results from its review of the register and is particularly aimed at community amateur sports clubs. It recognises that promoting community participation in sport, in order to provide "healthy recreation", can now be charitable. This may be the case where land, buildings and equipment are provided or where sporting activities are organised. It is deemed essential that the activities in question promote physical health rather than simply physical skills. In addition, a sports club seeking charitable status must have open membership. Any access restrictions must be reasonable, for instance a health and safety limit on participant numbers due to the limited size of the facilities, and membership subscriptions must be affordable to the majority of the community. The Commission suggests it is unlikely to accept as charitable dangerous "extreme" sports or sports which do not provide adequate physical health benefits such as angling or ballooning. In addition, it is now recognised that the advancement of physical education of young people outside of formal education can be charitable.
TRADING SUBSIDIARIES
Increasingly voluntary organisations and charities are exploring 'commercial' activities as a way of raising funds for their main activities. Involvement in trading for non-profit organisations, in particular those with charitable status is something to be considered very carefully.
For a charity to carry on commercial trading activities it is advisable do so through a subsidiary organisation. Trading through the main charitable body itself runs the risk that, at best, the profits made will be taxable and, at worst, the charitable body may lose its charitable status. Using a subsidiary company to carry on all the trading activities is one way to remove these risks to the charitable body itself. The subsidiary carries on the trading activities and either covenants or donates all its taxed profits to the main charity which then recovers the tax already paid.
Examples of trading might include the sale of other than donated goods in a charity shop, running a cafe, or selling services. Many charities are paid to provide services, for instance under contract to a local authority, and this should not be a problem as long as the activities serve the main objectives of the charity. Setting up a trading subsidiary should be considered when the services provided are ancillary to the main objectives of the organisation.
There can be difficulties with the initial funding and formation of trading subsidiaries as these very actions are considered to be speculative and not suitable for a charity. The most common way to deal with these problems is for well-wishers or supporters of the charity to form the company with the shares then being transferred to the charity. Clearly, all other aspects of running a commercial activity, such as VAT implications, insurance, health and safety issues, food hygiene regulations, and so on should be considered before setting up.
CHARITY SUBSIDIARIES
A 'charity subsidiary' is a body which is owned by an organisation which itself is a recognised charity. The subsidiary is a legal entity distinct from the charitable organisation and may, or may not, be a recognised charity itself.
Charities may consider establishing a subsidiary organisation for a number of reasons; the most common is in order to carry out trading activities. Other uses for subsidiary companies are, for example, to limit liability on a planned risk, such as taking a lease of property. Alternatively they may be used where an existing charity has an established presence in one geographical location and chooses to have a presence elsewhere. Rather than establish a 'branch' of the existing body it is possible to have subsidiaries established in a whole variety of locations.
The reason that it may be advisable to set up a subsidiary for trading purposes is that trading through the main charitable body itself runs the risk that, at best, the profits made will be taxable and, at worst, the charitable body may lose its charitable status. Using a subsidiary company to carry on all the trading activities is one way to remove these risks to the charitable body itself. The subsidiary carries on the trading activities and either covenants or donates all its taxed profits to the main charity which then recovers the tax already paid.
VALUE ADDED TAX
There is a common misconception that charities do not pay tax of any kind. It is true that they are exempt from Inland Revenue Taxes except in the employment of staff where pay as you earn has to be operated. However, there is no exemption for charities from Value Added Tax if the organisation's business income exceeds the threshold set at the Budget. It is important for voluntary organisations to consider their VAT position and to register for VAT purposes, even in advance of the anticipated income from business activities exceeding the limit. Late registration can result in penalties. Unlike a commercial operation which generates income through the actual provision and sale of goods or services, a charity has a complex variety of income sources.
Some of these sources such as donations, legacies and grants are freely given without the expectation of goods or services being given in return. In VAT terms, such income is derived from non-business activities and is therefore outside the scope of VAT. On the other hand, the sale of goods produced by the beneficiaries of a charity or services provided to members could be construed as 'business activity' and therefore subject to VAT. 'Business' has a very wide meaning for VAT purposes. It is easier to define the activity as "business" unless it can be clearly defined as "outside the scope" of VAT. A voluntary organisation, having registered for VAT, must charge VAT on business supplies as appropriate. However, the voluntary organisation is then in a position to reclaim some or all VAT charged to it. As the income of voluntary organisations is often very complex it is highly likely that there will be a mixture of business and non-business activities; taxable and exempt (non-taxable) supplies; standard and zero-rated taxable supplies. VAT charged on supplies relating to exempt activities is not reclaimable for example.
Specific Relief for Charities: Recognised charities are eligible for some special concessions, which enable them to buy goods at zero rate, although they are normally standard rated. It is necessary to provide proof of charitable status to allow the supplier to waive the VAT charge to zero and it applies to: aids for persons with disabilities, vehicles and ambulances, disabled access. As all VAT regulations are subject to regular updating and change it is vital for voluntary organisations to constantly review their VAT position, possibly with the help of their professional advisers.
BACKGROUND
Coddan can help with both existing registered charities that wish to incorporate as limited companies, or new organisations that wish to operate as a corporate charity from scratch.
Coddan has specialist expertise in relation to charitable companies and associated matters. For example we may be able to assist with the charity registration application process and we can help you respond to relevant matters raised by the Charity Commission, following the application, including queries about the company's Memorandum and Articles. We can also provide help in relation to existing unincorporated charities which are changing to incorporated status and for incorporated charities which need assistance in relation to charity and company law requirements and practices or are changing or updating their Memoranda and Articles, revising their trading subsidiary arrangements or undertaking various other transactions, changes or restructuring. Please contact us with details of your needs.
Trading companies for UK charities. Charities themselves can only trade in very limited circumstances. The solution is often for the charity to form a trading company to conduct trading or other business activities.
Tax Planning Through The UK Charity
Registering as a Guarantee Company
£ 42.00
This is our most popular package with UK residents, and includes:
Submission of applications that details company's executive officers
+44 (0) 141.530.8188 
+44 (0) 289.099.8744 
