Community legal structures

Legal structuresOnce you have decided to pursue a community energy project it is important to devote time to considering how to structure the organisation that will deliver the intended outcomes.  There are a range of models available, each with its own advantages and disadvantages, including varying legal and regulatory obligations.

Deciding on which type of organisation is most suitable will depend on a range of factors such as what the main activities of the organisation will be, how the project will be run and how you wish to engage members of your community in the project.

 

You will need to give some thought to:

  • Organisational Type: for example a social enterprise, a cooperative or a partnership
  • Legal Form: the type of organisation as defined in law such as an association, a trust, a limited or community interest company (CIC) or an industrial and provident society
  • Charitable Status: there are obvious benefits to being a charity in particular with regard to tax but in order to become a charity you must meet specific criteria defined in law

 

The form you choose will have implications in terms of democratic accountability, the personal responsibilities and risks borne by your management group or trustees, annual accounting and reporting requirements, and the income and tax options that are available to you.

Consider carefully which type of structure is most appropriate to achieve your goals. For example, if it is a time-bound project rather than an on-going group then there may be no need to become a formal organisation. If you do need to become a formal group then plan ahead, and be realistic about what you might achieve. It’s important you don’t overburden yourselves with an overly complex structure, regulatory obligations and substantial administration overheads.

The National Council for Voluntary Organisations and CooperativesUK have jointly produced a helpful guide called ‘Governance and Organisational Structures’ which sets out a series of questions to help lead you through this selection process.  This is available along with a wealth of other information from the ‘Get Legal’ website here.  CooperativesUK has also produced a useful guide called ‘Simply Legal’ which is available here.

A number of organisations in Cornwall may also be able to provide you direct support.  These are:

Useful resources and specific support are also available from a number of national organisations including: