Constitutions

 

Conventional companies

 Private limited company - This is the format of most small companies. It can issue shares, take out loans and carry out all the normal business functions. The company can pay dividends to shareholders, pay staff etc. principal object is to create income for the shareholders.

 Annual returns have to be made to companies' house and annual accounts produced - a small company does not have to have an audit

Needs one director and one shareholder and is simple to set up. Simplest way is to do it through the one on of the company formation companies. Charge something like £200 plus Vat.

 You can do it yourself but more hassle, or use a local solicitor which may take longer and will cost much the same


Community companies and entities

These are essentially companies set up for the sole interest of the community and they have restrictions on the payment of dividends, interest on loans etc

The principal ones are

 Company limited by guarantee =The most usual form of company – this doesn’t have shareholders but members who guarantee £10 in the event of the company having to be wound up. Such a company can take loans and pay interest but cannot pay dividends to the members. All profits must be used solely for the object of the company

Very simple to set up with the minimum of problems in running it. This is the most popular form for community projects and is being used by the Goddess Temple, the Tourist Information Centre, the Abbey et

 Needs only one director and one member although can have as many of each as it wishes. As very simple rules, minimum requirements for accounts and annual returns and can pay directors and members for work done for the company.

Community Interest Company = This is a conventional limited company set up as a CIC company. It enables the company to do everything that a conventional company can do but there is a block on its ability to pay dividends, interest on loans etc.  It has to be registered with the FSA which involves a considerable amount of hassle.

This has the advantage that it can have shareholders but the disadvantage that the dividends are strictly limited plus the need for complex and time consuming  annual returns to the FSA

 This is a relatively new concept and, .

Industrial and Provident societies = These are different form of structure and have to be registered with the industrial and Provident Association.

Essentially they can own properties and trade and can issue shares. Shareholders have one vote regardless of the number of shares they hold. This is the format that has been used by the Red Brick Building company and the Assembly Rooms

Charities - A Charity is usually either a company limited by guarantee or a trust. They have the disadvantage of being tightly limited to their objects but the advantage that they do not pay tax on profits.

General - information on all these types of companies can be found via Google