Humshaugh Net Zero Formation

How we formed Humshaugh Net Zero.

When we decided to form Humshaugh Net Zero we spent time considering what structure we would need. This is the process we followed which you might find of interest. To select the most suitable structure we need to decide upon a range of key factors.

We assumed that the plan was to create a structure of some sort through which the group can drive forward on a number of key issues and actions. It is therefore assumed that the required structure is more than a simple short-lived committee or action group made up of volunteers.

We chose to be a Community Interest Company

However we chose a Community Benefit Society for our Community Solar Project so that we could issue shares.

Here follows the questions we had to answer.

Humshaugh village - aerial view
Humshaugh Church

  •  Individual gifts and donations
  • Grants and fundraising
  • Private sector funding or donations
  • Selling services or goods

  • The wider community, regardless of involvement in activities will be invited?
  • Individuals in the community who commit to being active in supporting the work?
  • Local community organisations?
  • Parish Council?

  • To benefit the members?
  • To benefit the wider community?
  • Or both?Access our library of resources, including articles, videos, and podcasts, on a range of topics related to our community’s interests and goals.

Charitable purposes include things that contribute to:

  • relieving poverty
  • education
  • religion
  • health
  • saving lives
  • citizenship or community development
  • the arts
  • amateur sport
  • human rights
  • religious or racial harmony
  • the protection of the environment
  • animal welfare
  • the efficiency of the armed forces, police, fire or ambulance services

  • Will the organisation hold a bank account?
  • Will the organisation be required to sign any contracts?
  • Will insurance be required to cover any activities?
  • Will it sell anything?

  • Who will appoint/elect the Board/Committee?

We looked at 4 different structures. We arrived at the following pros and cons for each type of structure before we chose the Community Interest Company (CIC)

Structure Options – summary of pros and cons
Structure Description Pros Cons
1 – Simple committee or action group (time‑limited constitution) Members required and a mechanism for agreeing who is a member.
  •  Must have charitable purposes to be eligible.
  • Accountability can be difficult, and some may see it as a ‘club’
  • Fundraising can be difficult as no real structure
  • Typically unincorporated – bank accounts/contracts often in individuals’ names.
2 – Association Has a simple constitution setting out who the members are and how the committee is elected.
  • Easy to form; little admin beyond managing members and meetings.
  • Unincorporated – liability sits with committee members.
  • Bank accounts and contracts are in individuals’ names.
3 – Company Limited by Guarantee or Community Interest Company (CIC) A CIC is a non‑charitable company primarily to benefit a community/social purpose, rather than making profit.
Incorporated company (as with the village shop). Has members.
  • Can have an “asset lock” meaning any assets or funds left after closure must be given to another similar organisation (if it is a CIC then it must have this asset lock).
  • No distribution of profits (for CICs).
  • Separate legal entity – can hold bank accounts and contracts in its own name.
  • Limited liability for members.
  • Funder‑familiar structure.
  • It’s a company – requires company administration.
  • Membership needs to be clear as members have rights.
  • The Board members are directors in law.
4 – Charity (Charitable Incorporated Organisation, CIO) Must have charitable purposes to be eligible.
  • Eligible for tax relief.
  • Can apply for charitable funds and grants.
  • Incorporated – separate legal entity; can hold bank accounts and contracts.
  • Funder‑familiar structure.
  • No liability for members.
  • Charity administration and regulation.
  • Activity limitations; must comply with charity legislation.
  • Registration can take a long time.
  • Not suitable for all trading or for making a profit.
  • Board members are charity trustees.