How did we form 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.

Here follows the questions we had to answer

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.

1. Where will the bulk of the income (including start up) come from?

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

2. Who will be the members?

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?

3. What is the purpose?

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.

4. Is the purpose charitable?

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

5. Contracts, banking & trading?

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?

6. Board or committee?

Who will appoint/elect the Board/Committee?

Structure Options

ONE Simple committee or action group with time limited constitution

Members required and also a mechanism for agreeing who are members

PROS

ONE Simple committee or action group with time limited constitution

Must have charitable purposes to be eligible .

CONS

ONE Simple committee or action group with time limited constitution

TWO Association

Accountability can be difficult, and some may see it as a ‘club’
Fundraising can be difficult as no real structure
Holding a bank account would have to be in the names of individuals

TWO Association

Has a simple constitution that sets out who the members are,
How the committee is elected etc

PROS

TWO Association

PROS

Easy to form requiring little admin other than managing a membership and meetings of the members as well as meetings of the committee.

CONS

TWO Association

PROS

Unincorporated so any liability lies with the committee members
Bank accounts and any contracts would be in the name of individuals

THREE Company Limited by Guarantee or Community Interest Company (CIC)

A Community Interest Company (CIC) is a non charitable company which exists primarily to benefit a community or with a view to pursuing a social purpose, rather than to make profit
Incorporated Company (same structure as the village shop)
Has members

PROS

THREE Company Limited by Guarantee or Community Interest Company (CIC)

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 (if it is a CIC then it must have this)
Is a separate legal entity and can hold bank account and contracts in its own name.
Limited liability for members.
Funders are familiar with the structure

CONS

THREE Company Limited by Guarantee or Community Interest Company (CIC)

FOUR Charity - a Charitable Incorporated Association (CIO)

It’s a company and needs company administration.
The membership needs to be clear as the members have rights
The Board members are directors in law.

FOUR Charity - a Charitable Incorporated Association (CIO)

Must have charitable purposes to be eligible

PROS

FOUR Charity - a Charitable Incorporated Association (CIO)

PROS

Liable for tax relief
Can apply for charitable funds and grants
Incorporated so is a separate legal entity and can hold bank account and contracts in its own name.
Funders are familiar with the structure.
No liability for members

CONS

FOUR Charity - a Charitable Incorporated Association (CIO)

PROS

Charity admin and regulation
Limitations on what the organisation can do and must comply with charity legislation
Can take a long time to register
Not suitable for all trading or making a profit.
Board members are charity trustees

How did we form Humshaugh Net Zero?

1. Where will the bulk of the income (including start up) come from?

2. Who will be the members?

3. What is the purpose?

4. Is the purpose charitable?

5. Contracts, banking & trading?

6. Board or committee?

Structures

Structure Options

ONE Simple committee or action group with time limited constitution

ONE Simple committee or action group with time limited constitution

ONE Simple committee or action group with time limited constitution

PROS

ONE Simple committee or action group with time limited constitution

ONE Simple committee or action group with time limited constitution

CONS

ONE Simple committee or action group with time limited constitution

TWO Association

TWO Association

TWO Association

TWO Association

PROS

TWO Association

PROS

CONS

TWO Association

PROS

THREE Company Limited by Guarantee or Community Interest Company (CIC)

THREE Company Limited by Guarantee or Community Interest Company (CIC)

THREE Company Limited by Guarantee or Community Interest Company (CIC)

PROS

THREE Company Limited by Guarantee or Community Interest Company (CIC)

THREE Company Limited by Guarantee or Community Interest Company (CIC)

CONS

THREE Company Limited by Guarantee or Community Interest Company (CIC)

FOUR Charity - a Charitable Incorporated Association (CIO)

FOUR Charity - a Charitable Incorporated Association (CIO)

FOUR Charity - a Charitable Incorporated Association (CIO)

FOUR Charity - a Charitable Incorporated Association (CIO)

PROS

FOUR Charity - a Charitable Incorporated Association (CIO)

PROS

CONS

FOUR Charity - a Charitable Incorporated Association (CIO)

PROS

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