Website of the UK government

Main types of charities

Charities can be:

• private limited liability companies also known as incorporated associations
• unincorporated associations
• trusts

There are other forms a charity can take without being registered. To find out more read ‘Alternatives to setting up a registered charity’.

• Alternatives to registering as a charity

Private limited liability companies

You may want to create a limited liability company if the organisation is likely to:

• be large
• employ people
• enter into contracts to deliver or use services
• own land or property

An example of a charity that is a limited company might be a local arts charity that promotes the culture of a particular group in the community by organising cultural events. They might need to be a limited company in order to hire a lighting company for an event.

• Advice on setting up a limited liability company from Business Link Opens new window

Unincorporated associations

You may want to use this structure for your charity if:

• the organisation has members whose views need to be reflected in the running of the organisation
• the members of the organisation elect trustees for a fixed period of time
• members are involved with the running of the organisation
• the organisation does not have very large assets (ie property, land or investments) or a high turnover
• the organisation will not need to hire staff or enter into any other contracts

Examples of an unincorporated association might be a residents association that meets to improve the local area.

• Unincorporated associations guide from Business Link Opens new window

Trusts

Creating a trust may be advisable if:

• the organisation will be run by a small number of people and its administration will be simple
• trustees will be chosen by existing trustees and there is no time limit on how long they will be in office
• the organisation is not likely to need to rely on members for its administration
• the organisation’s sole activity is giving grants
• land and buildings are to be held on trust for permanent use of the charity
• there is to be a restriction on the spending of the capital

This type of charity might be set up by a group wishing to distribute the funds left in a will for a particular purpose.

• Information on trusts from Business Link Opens new window

Getting help and advice

Deciding on the best structure for your organisation can be complicated so you may want to take professional advice. Your local council may have details of places you can get advice.

• Find your local council
• Sources of legal advice from the National Council for Voluntary Organisations Opens new window

More useful links

• Advice about different types of charity from the Charity Commission Opens new window