A "charity limited by guarantee" has no shares or share capital, but the Directors (Trustees) commit to a prescribed limit of liability in the event of failure. Each Trustee declares a commitment to the trust company in the form of a nominal financial commitment, payable in the event of a winding up order by creditors.

The Trustees/Directors are not allowed to take a salary from the company, although they may reclaim expenses or charge fees for professional services provides. Each Trustee/Director has one vote at the company’s meetings (“one member one vote”). The Aims of the company must be set out in the Memorandum and Articles of Association for the company, which must follow the format prescribed by the Charity Commission.

The Memorandum and Articles of Association, which are essential documents for the formation of your company, must contain statements about the Aims (objectives) of your charity. Before forming your company you should thing through these issues and write down in simple terms what you are aiming to achieve through the company.

IMPORTANT. Once your company is formed you will also need to register with the Charity Commissioners (Telephone 0870 333 0123 - website www.charity-commission.gov.uk). They will need to make various checks to ensure you meet their stringent criteria to become a registered charity.

If you need help with charity accounts, with applying for charity status or with related issues, Duport can put you in touch with qualified Accountants who are specialised in charity issues.