legal structures

Trusts

A trust is the traditional structure for a charity, adopted by many older groups.  For the trust to also be a charity, Charity Commission for Northern Ireland  must approve its purposes and activities. 

Trusts are unincorporated and do not have any independent existence in law. Therefore, the trustees are personally responsible for any debts or claims against the organisation that cannot be met out of the organisation's own resources.

Type of Organisation: Trust

Company Limited by Guarantee

A company limited by guarantee is an incorporated organisation.  This means that it has gone through the registration process that converts a new or existing business into a corporate body, making it a legal entity in its own right.  

With a company that is limited by guarantee, the financial liability of members, including the Management Committee is usually limited to a nominal amount, should the company face financial difficulties (although it does not protect against fraud, negligence, etc).

Charitable Purposes

In Northern Ireland, a charity is defined as an institution which is established for charitable purposes only and is for the public benefit.  If an organisation is established for one or more of the 12 descriptions of purposes listed below, and is for the public benefit, then it will be required to register with the Charity Commission for Northern Ireland

The 12 descriptions of charitable purposes are: 

Legal Terms Explained

This section provides a brief explanation of the terms associated with your legal structure.

Legal structures for organisations in the voluntary and community sector fall into two main categories: unincorporated and incorporated.  It is important to understand the differences between these and therefore the implications of the legal form that your organisation has, particularly in relation to the potential personal liability of Committee members.

Info Sheet: Industrial & Provident Society

An industrial and provident society (IPS) is an organisation set up to carry out a trade or business for community benefit. It is incorporated, which means that it has gone through the registration process that converts a new or existing business into a corporate body, making it a legal entity in its own right.  IPSs are regulated by the Financial Services Authority, which took the job over from the Registrar of Friendly Societies (both being supervised by the Treasury).

Type of organisation: Industrial and Provident Society (IPS)

FAQs: Legal structures and charitable status

Please note this section is UNDER REVIEW. For the most up to date information on charitable purposes and activities see NICVA's article on Charitable Status.

Following are answers to a number of frequently asked questions regarding legal structures and charitable status.

Q: How do we prove that we are a charity?

A: The letter from Inland Revenue is evidence that you are a charity for tax and most other purposes