A guide to third sector trading - WCVA

It’s an idea, but is it business? A guide to third sector trading
4: Legal and governance structures 72
4.1 Incorporation or not? 73
Before you start: 73
What is incorporation? 74
When to incorporate 75
What’s involved? 77
Contacts 77
4.2 The options for trading organisations 78
Basic issues 78
The options for trading organisations 81
Companies limited by guarantee –
advantages and disadvantages 82
CICs – advantages and disadvantages 83
Contacts 85
4.3 Charities and trading 86
Knowing where you stand 86
Types of trading 88
4.4 Choosing a structure: charities 91
Deciding whether to register a charity 91
Charitable Incorporated Organisations (CIOs) 94
4.5 Community interest companies 95
What are CICs about? 95
The value of CICs 96
Key provisions of the legislation 98
Contact 99
4.6 Do you need trading subsidiaries? 100
What is a trading subsidiary? 101
Pros and cons of trading subsidiaries 102
5: Funding and resourcing the business 105
5.1 The right investment for your new businesses 105
Planning ahead 105
‘Sustainability’ or ‘growth’ 106
Planning and start up funding 110
Planning for future growth 113
5.2 Resourcing sustainable enterprises 114
What does sustainability mean? 114
Flexible and diversified funding 117
Practical steps to improving sustainability 119
5.3 Financing the trading arm 124
Funding options for charities and their trading subsidiaries 124
Legal obligations when charities invest in trading subsidiaries 127
How does this help the charity? 129
5.4 Raising money with shares and bonds 131
6: Financial controls and monitoring 133
6.1 The basics of financial monitoring? 133
An overview 133
Being serious about business 136
Who does the monitoring? 140
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