A range of legal strucutres are available when starting a new organisation, please see the information sheet on choosing a legal structure for more information.
A few of the more common types of structure are:
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
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).
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:
An Association is the simplest and favourite legal structure, usually chosen by new groups. An association may also be a charity, if Charity Commission for Northern Ireland determines it is charitable. More on starting a new charity.
Type of Organisation: Association
Legal Status: unincorporated
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.
Your agreed set of rules for how the organisation will operate, your "governing document", will usually be drawn up during this stage of your development.
The following article from NICVA provides a useful starting point:
A range of case studies showcasing Northern Ireland's Social Enterprises are available from Social Enterprise NI:
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)
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