Charity Structures for International Religious Organisations

If you’re an international religious organisation looking to establish a formalised legal charity in the UK, there are several structures you can adopt to carry out your philanthropic activities. You may wish to bring overseas workers to support your endeavours, but it is crucial to establish your charity and obtain your charity number before considering visa applications.

The three primary structures to consider are trusts, charitable companies, and charitable incorporated organisations (CIOs).

Trusts

Trusts are a well-known but often considered an archaic structure. Trusts are unincorporated, meaning that the trustees of the charity have personal liability and can be sued personally. To register with the Charity Commission, a trust needs a minimum income of £5,000, which is standard for most charity structures.

It is good to be aware of trusts, but they are generally not recommended due to the personal liability involved.

Charitable Companies

A charitable company is established as both a company and a charity. It is considered established from the point of registration with Companies House, which can take around 72 hours. This means you don’t have to wait for registration with the Charity Commission to begin charitable activities in the UK, which can take up to six months. This is particularly beneficial if you wish to purchase property in the UK quickly. Like trusts, a charitable company requires a minimum income of £5,000 to register with the Charity Commission.

Unlike trusts, charitable companies are incorporated structures, limiting trustee liability, meaning trustees cannot be personally sued. Another significant advantage is that charitable companies are generally recognised internationally, which can facilitate dealings with foreign banks and reduce the need for extensive explanations. This structure can also be advantageous if you need to borrow money, for example, to purchase property, as banks often prefer charitable companies over CIOs, although this preference is changing.

The primary disadvantages of charitable companies are that they are subject to both the Companies Act and the Charities Act, and the trustees are also directors. This dual responsibility requires some education to ensure compliance with both sets of regulations, including dual reporting.

Charitable Incorporated Organisation (CIO)

The Charities Commission introduced the CIO structure because many people found the concept of a charitable company too complex. CIOs are incorporated structures that limit trustee liability, meaning that any legal claims are limited to the assets within the CIO.

There is no income threshold for registration with the Charity Commission, so you do not need a pledge letter from your parent charity. However, you must wait for the Charity Commission to grant charitable status and provide a charity number before commencing philanthropic work and bringing overseas workers to the UK.

A key advantage of a CIO is that you only need to file annual reports with the Charity Commission, unlike a charitable company which requires dual reporting. CIOs are more suitable for smaller organisations not looking to purchase property immediately and are comfortable with the wait for Charity Commission registration.

It is essential to remember that before bringing overseas religious workers to support your charitable activities, you must have chosen your charity structure and received your charity number from the Charity Commission.

If you want to set up a charity in the UK to facilitate your philanthropic work, get in touch with Peter Spencer today by email at peter.spencer@wellerslawgroup.com.