Considering Organisational & Governance Issues

1. Considering Organisational & Governance Issues Getting it built! 6 November 2013 Sarah Lines – Senior Associate Email: sarah.lines@anthonycollins.com Tel: 0121 214 3609

2. The CLT Network’s Toolkit Designed to help groups consider: the difference in legal structures; how to choose; link into financial planning; timing of grant funding, land acquisitions and need for trading subsidiary.

3. The CLT Network’s Toolkit * Model constitutions Checklists Jargon buster Guidance Links to Charity Commission, FCA and HCA websites *other toolkits are available !

4. Why do we need a legal form? Protection from personal liability Fulfil statutory definition for grant funding Confidence of community Ability to attract funding/donations

5. How do you choose? Identify what it is you want to achieve Identify your values Financials

6. What are the choices? Industrial and Provident Society* Company Limited by Guarantee* Co-operative Society Community Interest Company Charitable Incorporated Organisation * with or without charitable status

7. Each legal structure will allow for Asset Lock – retaining the profits and assets in perpetuity for the public good/benefit of the local community; Defined membership and control; Transparency and accountability.

8. Set up and on-going costs for IPS registration fee : £40 - £950 sponsoring body’s fee : @ £450 annual running costs, accountants fees annual audit fee (where appropriate) periodic fee : £55 - £425 (determined by total assets £’ 000s)

9. Set up and on-going costs for CLGs, CICs, CIOs CLGs incorporation : £13 - £40 CICs incorporation : £35 annual running costs, accountants fees; Companies House costs e.g. change of name : £8 annual return processing fee : £13 - £40 (web paper) CIOs incorporation : no fee, on-line registration

10. What does the constitution do? Objects (purpose) Powers (to carry out the objects) Internal administration – Board meetings Public accountability – annual reports, general meetings Rule changes

11. Legal definition of a CLT A corporate entity established for the purpose of furthering the social, economic and environmental interests of a local community by acquiring and managing land and other assets in order: to provide a benefit to the local community; and to ensure that the assets are not sold or developed except in a manner which the Trust’s members think benefits the local community.

12. Legal definition of a CLT cont’d The CLT’s legal structure must also include provisions that are designed to ensure that: any profits from its activities will be used to benefit the local community (otherwise than by being paid directly to members) individuals who live or work in the specified area have the opportunity to become members of the Trust (whether or not others can also become members) the members of a Trust control it.

13. Community Right to Build Organisations The constitution must set out that: voting members must include people who live or work in the area – there must be at least ten members overall living in different dwellings the constitution must set out that the members who live or work in the area of benefit have the majority vote: at membership level at Board level

14. Community Right to Build Organisations The constitution must set out a statement that the organisation: will carry on its community activities for the benefit of the community in the particular area or a section of it indicate now it is proposed that its activities will benefit the particular area or section of it

15. Community Right to Build Organisations The constitution must set out: how its assets are restricted in use so as to benefit the community it serves that any profits must be used solely to benefit the community it serves (no payments to members) on winding up its assets must be transferred to another corporate body with similar objects

16. Adapting legal structures to suit your project CLG : easily adaptable but works both ways CIC : CIC Regulator’s minimum requirements and model Articles IPS : sponsoring bodies’ rules adaptable but not so as to change the essence of it CIO : Charity Commission’s model – essential amendments allowed

17. Pros and Cons to consider Finances – tax, cross subsidy, basis of land donation/transfer and timing Charity law – the need for a trading subsidiary? Asset lock – essential? Not for profit ?

18. How to protect the essence and assets of your organisation Asset lock – that can survive Inherent essence protected Property documentation or constitution? Constitutional trustee ? Longevity

19. Considering Organisational & Governance Issues Getting it built! 6 November 2013 Sarah Lines – Senior Associate Email: sarah.lines@anthonycollins.com Tel: 0121 214 3609