Do I need to set up a company Limited by Guarantee?

[JasonCl]

I run a Multi Sports Coaching company which is set up and operating as a Limited Company (by shares). We run a number of sports/movement programmes to children from the ages of 4-18 in a variety of settings. Whilst we strategically operate our camps/clubs in areas which a child's parents are able to pay for their children to attend. I am now looking at ways in which I can enable those children living in areas of high deprivation to also engage in sport. Is there any way I can achieve this whilst still running the limited company for my private clients. Whilst I cant simply offer these children a free place on a camp, would there be any other alternatives ie setting up a limited guarantee company alongside my limited company, which would then allow me to secure funding to run camps for these children/groups.

Apologies in advance for my lack of knowledge in this area, hope you understand what I am getting at!!

Advice please

 

[gj]

I think you would have to have a company limited by guarantee to secure such funding - it may even need to be a registered charity in order to secure certain funding, but that may be going a stage further than you wish to.

The problem with a straightforward company limited by guarantee is that, although it is great for a not for profit organisation (it has no shareholders, therefore profits cannot be distributed to shareholders) the people making grants may want to satisfy themselves that the company is not going to be subjected to unreasonable costs - such as directors fees, management charges etc from the main trading company. It may be difficult to satisfy them of this point - since you would not be answerable to the charity commissionesr etc if it was not a charity, they get no comfort from that.

It may make sense for it to be a club or association, with a suitable constitution, formed as a company limited by guarantee. The constitution or memorandum and articles of assocaition would normally state that any reserves/assets held by the company if it is wound up should be distributed to a similar organisation or given to a charity.

HTH


Graham

 

[JasonCl]

Cheers for the swift responce!!

If I look to set up a sports club/association as a limited (by guarantee) company for deprived children, offering pretty much the same services as the sports coaching company im running at the minute. Are there any legalities that I need to be aware of with regards to bringing myself in to run the sports coaching sessions for the non profit making company?. (presuming that I can secure funding for the club). Are there any legal issues to say that I can't offer my companies services (for payment) if for instance I am the chairman of the non profit making company?

The reason I ask is because I am an active director of the company and the sports coaching side of operations is what I deal with. Business side is left to oeprations manager. It will be the sports coaching side that is needed to run non profit making company.

Cheers again graham

 

[gj]

A club or association would normally have a committee. You would need to declare your interest in any proposed contract with your trading company and probably could not vote on whether it should be accepted or not.

The committee might well approve it, in which case I do not believe their is any reason why your company should not supply the services for a payment. If you are wanting to do this for the right reasons, rather than as a means of additional sales, then I guess you would price the services sensibly - giving the committee no particular reason not to use your company rather than another, thoguh they may ant to get alternative quotes.

Any entity making grants would also look at the constitution and probably the rules for dealing with a company in which any director/committee member of the company limited by guarantee had an interest. If they were happy you did not have undue influence over whether the contract was placed with your company or not, they would probabaly be happy with making the grant - assuming all other criteria are met.

HTH

Graham

 

[JasonCl]

Graham,

Yes makes a lot more sense now, cheers again for the enlightenment. Will be looking at the start of the new year at setting something up.

Cheers

Jason

 

[Ozzy]

Hi Jason,
Graham has covered all the points well so no need to add to them. However, if you would like to view a standard set of Memorandum & Articles used for a Limited by Guarantee company drop me a PM with your email address and I'll send a set over.

The main point as Graham says is there will be usually be a committee who must make an unbias descision as to what contractor to use for certain jobs. If a member of the committee is involved with any companies tendering for the work then that member must leave the room whilst discussions are being made about what contractor to use.

Good luck for the new year!

 

[chadehlertsen]

Just read the thread regarding setting up a sports coaching non profit groups or sports association. I am in exactly the same situation. I run a sports coaching company.

We want to set up a non profit group / Sports association to try to draw down funding and then possibly use our company as a delivery arm.

Just really want some help and guidance.

Can anyone help.

Chad

 

[chadehlertsen]

Have a similar situation. I run my own limited coaching company but want to know how to set up a non profit group that can be used to apply for funding.

Hopefully then use our business to deliver any work.

Can anyone help or provide advice