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The LBG companies are the most suitable option for charitable foundations. So, all the charities, start-ups, or established ones along with non-profit organizations. This model of the company is ideal for non-profit societies, sports groups, universities, schools, charity associations, volunteers, and such.
LBG – Limited by Guarantee formation service
Certificate of Incorporation
Included free of cost with company formation service.
A distinctive address for VAT registration
LBG or limited by guarantee company is different than the structures based on equity. It comes with no shareholders or there’s no shared capital. Instead, an LBG structure consists of members who are the guarantors of the company. In this regard, the guarantors here are also called trustees or governors, or committee members. The title depends on the organization itself.
And, each guarantor has some tasks or duties towards the company. These are –
In order to be able to get registered with the Charity Commission, a company’s annual gross profit has to be above £6000. And, if a business has less than £6000 of gross profit, the entity can obtain tax exemptions from HMRC. However, this happens when the items of the company are charitable and the Articles puts a restriction on using funds and profits for charity purposes.
Furthermore, the service will provide Association Articles. And, you will have to edit these. To be able to achieve the tax exemption requirements of HMRC, well-written documents are the key.
According to the Companies Act of the UK, the word “Charity” is a sensitive term. Thus, you can only add the term with your company’s name when you are registered with the Charities Commissions.
Therefore, one must incorporate their business first. And then, register with the Charities Commissions upon being able to fulfill the requirements. So, if you use Charity in the name, it is better to change it until the grounds are met.
Articles of Association demand the amendment of provisions that are allowed by the Company Acts for HMRC. This is the legal gateway for obtaining tax exemptions if the annual turnover is less than £5000. Also, it will be applicable if your business does not contain the suffix LTD in the company’s name.