A non-profit company or non-business entity provides funds and services to make educational, professional, and cultural objectives successful. As the name suggests, non-profit companies don’t make profits. Instead, they use the extra money they receive on projects that make society a better place for everyone. A few examples of non-profit companies are associations, cooperatives, voluntary organisations, and charities.
Registering a non-profit company
Starting a non-profit company does involve some risks as you must rely on funds from various sources. You need to have a backup plan ready in case an organisation can’t provide the funds it had promised earlier. But before that happens, you need to register your non-profit company to get the ball rolling. Here’s how to proceed with the registration process:
1. Convince organisations for funds
The first step to register a non-profit company is contacting companies that may fund your organisation. Registering your company without discussing your plan with funding companies would be like taking a shot in the dark. Figure out a way to pitch your plan so that it’s effective enough to convince others.
One strategy to secure funding is to start small. Start by helping out underprivileged people within a small area. That should give your company enough credibility to convince other companies to provide funds that can take care of various societal problems. Instead of merely focusing on “helping people,” you should pay attention to “helping people in ‘xyz’ region.” As soon as you narrow down your mission to a specific location, companies may feel interested in helping your company. Once they see that you are utilising their money properly, they may provide more funds for bigger projects.
2. Name your company
The registration process of a non-profit company requires that you choose a specific name for your organisation. Make sure you choose a name that your audience can relate to. Also, remember to check the charities register so that you don’t use a name that’s already being used by another company. Another thing that you should keep in mind while naming your company is whether to use the word “charity” or not. If you want to use “charity” in your company name, you need to contact the Charity Commission for approval.
3. Define your company’s structure
In addition to choosing your non-profit company’s name, it’s also essential to define its structure. Choosing a non-profit company’s structure involves answering a few questions, such as the following:
● Who will run the company
● How will he/she run the company
● What is your company’s mission
A few common structures of non-profit companies are community benefit society, charitable trust, and unincorporated organisation.
4. Creating the governing document
A governing document, also known as, rulebook, provides detailed information about your non-profit company. From defining its structure to discussing the roadmap to meet your goals, it contains everything that can give your audience an idea about why you are starting the non-profit organisation. Some of the information you need to mention in your company’s governing document are as follows:
● Your company’s mission
● How do you want to achieve that mission and who will be responsible for running the company
● How your company will appoint trustees
● What are the rules to meet the expenses of trustees
● What are the rules to pay trustees
● How do you wish to close your company if the need arises
5. Registering your company
Now that you know what to do before registering your non-profit company, it’s time to take a look at how the registration process works. An important part of the registration process is to set up your trustees and prepare the rulebook. Make sure you appoint your trustees before signing the documents.
Moreover, you should discuss with the companies that had promised to provide funds to your organisation regarding the amount you can expect. If you expect to make more than £5,000, you should register with the Charity Commission. You need to contact the Charity Commission if you want to set up your company as a charitable incorporated organisation.
The process is slightly different if you want to start a community interest company. Here are the online and offline methods that you can follow:
● Online registration – You need to go to the CIC website to register your CIC company with the Companies House. The registration process costs £27. First, you must create your Government Gateway ID and password. Set up your company profile by providing basic details. Remember, you can’t use any personal government gateway ID. Follow the instructions that come on your screen and fill out the information required carefully. Once you finish, the website will let you know when to expect the approval of your registration.
● Offline registration – If you don’t want to apply online, you can go for offline registration also. However, keep your company’s Articles of Association handy. Postal applications usually take up to 15 working days to get approval and cost £35. You need the following forms to register your non-profit company offline:
I. IN01 – Application to register your company
II. Form CIC36 – Application to form your CIC
III. Your company’s Articles of Association and Memorandum
Fill out the CIC and application form and send them to the Registrar of Companies. Attach a cheque of £35, payable to the Companies House.
6. Start raising funds
Once you register your non – profit Company, you can start raising funds from organisations that had promised you earlier. It’s best if you keep a tally for your income and expenses on different projects. That should help you at the time of paying taxes. A non-profit company gets various tax deductions, therefore, consult with a tax expert before filing. It may also be beneficial to hire a reputation management company to keep everything above board.
Registering a non-profit company isn’t as complicated as many people think. With online and offline methods available, you can pick an option that you think you understand the best. Just make sure that you fill out the forms correctly and address your cheque to the Companies House at the time of paying the registration fee. You can expect to receive your approval within a maximum of 15 working days from the day of sending your application.