Registering a charity

1. Who can register?

An organisation is required to register as a charity if it:

• Has charitable purposes
• Exists for the public benefit
• Has an annual income of £5,000 or above

2. Registration threshold

Only organisations with charitable purposes and with an annual income above £5,000 must register with the Charity Commission. This is known as “the registration threshold”. New Charitable Incorporated Organisations (CIOs) with anticipated annual incomes of under £5,000 will also be able to register as a charity.

You can find out more about CIOs and other legal structures for charities in our guide for charity legal structures.

3. Public Benefit

In England and Wales, public benefit is a crucial part of what it means to be a charity. A charity must have only charitable purposes. All of these charitable purposes must be for the benefit of the public. This is known as “the public benefit requirement”.

The public benefit requirement has two aspects:

• The benefit aspect
• The public aspect

In order to fully appreciate the meaning and significance of these aspects it is necessary to read the public benefit guidance provided by the Charity Commission.:

There are three guides:

• Public benefit: the public benefit requirement
• Public benefit: running a charity
• Public benefit: reporting

The Charity Commission website gives detailed guidance on public benefit.

4. Registration as a Company

A company is a corporate body registered with Companies House. Companies are subject to the Companies Act 2006.

The term ‘incorporated’ means that a company has a separate legal identity to the directors. The advantage to the directors is that it is the corporate body that holds property, makes contracts, and employs staff etc. and not the individual directors. You should be aware that Companies House is a firm regulator of companies and there are fines if deadlines are not met for filing accounts and other matters.

5. Incorporation as a company

Incorporation allows an organisation to limit the personal risk to individuals. This section considers the risks that may influence a decision to incorporate and the steps to take if your organisation wishes to incorporate.

The usual triggers for incorporation as a company are:

• Taking on a lease
• Buying a freehold property
• Taking on employees
• Raising finance
• Entering into contracts
• Risk management

Remember that if you need to register as a company you should do this before you register as a charity. The company will be registered with the Charity Commission.

6. Steps for incorporating

Organisations who wish to register as a company, can do so online through the companies house website. There should be a minimum of three directors to sign if you intend to register the company as a charity also.

All forms and instructions are available from the Companies House website.

7. Unincorporated charities

If your organisation is already a registered unincorporated charity then the procedure you need to follow is more complicated.

8. Company Responsibility

Many of the tasks and responsibilities that companies are responsible for are required by company law, this is enforced by Companies House.

Companies need to carry out a long list of administration tasks after forming a company and there also administration tasks that have to be carried out throughout the year. Some of the jobs include creating: a register of directors; a register of company secretaries; a register of members; a register of trustee interests and a legal charges register.

9. Legal Structures and Governing Documents