- Original Poster
- #1
Hi all,
So I've tried to understand this as best possible, but after countless hours of searching the web and reading various articles I'm now wondering if anyone here can help...
I've been running a recreational organisation for a few years. It's currently an LTD. It trades with memberships etc, makes a (nominal) profit and I pay myself a small amount of dividends per year as a 'wage'. There are currently no other employees. It's very straight forward, but alot of our work is done with a charitable nature to it - certain schemes where we subsidise costs for participants, and others where we offer a completely free service to those who can not afford it. I'm keen to promote this work further and thought setting up as a CIO (charitable incorporated organisation) would be a great way to do this, so we can pursue some funding for certain projects etc. My question is as follows;
We're a membership based business and make our income through subscriptions. We'd like to keep this separate and maintain it 'as is' via the LTD whilst launching some charitable schemes via the CIO to help those who can't afford the subscriptions. This would allow us to continue trading, as the bills will be paid, whilst also having a completely separate arm to what we do.
Is it legal to split our trade like this, so to have some of our services go through the LTD to make a profit and page wages (we're not really talking about profit, more just meeting the mortgage payments!) and the other half to be purely charitable through a CIO? For all intents and purposes we'd be the same organisation, but at the point of joining us (or entering into a contract etc) we'd of course confirm the legal principle so it's not a query about that - more just is it legal to split trade like this? I think private schools do a similar thing but I just want to try and be as clear as possible.
I hope this sort of makes sense! Appreciate any feedback you may have, good or bad.
Cheers.
So I've tried to understand this as best possible, but after countless hours of searching the web and reading various articles I'm now wondering if anyone here can help...
I've been running a recreational organisation for a few years. It's currently an LTD. It trades with memberships etc, makes a (nominal) profit and I pay myself a small amount of dividends per year as a 'wage'. There are currently no other employees. It's very straight forward, but alot of our work is done with a charitable nature to it - certain schemes where we subsidise costs for participants, and others where we offer a completely free service to those who can not afford it. I'm keen to promote this work further and thought setting up as a CIO (charitable incorporated organisation) would be a great way to do this, so we can pursue some funding for certain projects etc. My question is as follows;
We're a membership based business and make our income through subscriptions. We'd like to keep this separate and maintain it 'as is' via the LTD whilst launching some charitable schemes via the CIO to help those who can't afford the subscriptions. This would allow us to continue trading, as the bills will be paid, whilst also having a completely separate arm to what we do.
Is it legal to split our trade like this, so to have some of our services go through the LTD to make a profit and page wages (we're not really talking about profit, more just meeting the mortgage payments!) and the other half to be purely charitable through a CIO? For all intents and purposes we'd be the same organisation, but at the point of joining us (or entering into a contract etc) we'd of course confirm the legal principle so it's not a query about that - more just is it legal to split trade like this? I think private schools do a similar thing but I just want to try and be as clear as possible.
I hope this sort of makes sense! Appreciate any feedback you may have, good or bad.
Cheers.
