Set up a charity
Printable version
1. Set up a charity
There are 6 steps to setting up a charity.
-
Find trustees for your charity - you usually need at least 3.
-
Make sure the charity has ‘charitable purposes for the public benefit’.
-
Choose a name for your charity.
-
Choose a structure for your charity.
-
Create a ‘governing document’.
-
Register as a charity if your annual income is over £5,000 or if you set up a charitable incorporated organisation (CIO).
There are different rules in Scotland and different rules in Northern Ireland.
Tax relief
To get tax relief your charity needs to be recognised by HM Revenue and Customs (HMRC).
2. Charitable purposes
Your charity must have ‘charitable purposes’ that help the public (known as being ‘for public benefit’).
Charitable purposes include things that contribute to:
- relieving poverty
- education
- religion
- health
- saving lives
- citizenship or community development
- the arts
- amateur sport
- human rights
- religious or racial harmony
- the protection of the environment
- animal welfare
- the efficiency of the armed forces, police, fire or ambulance services
Read guidance on writing your charitable purposes.
You should also read about public benefit to decide if your charity’s aims are suitable.
You cannot set up a charity to help one specific person.
3. Name your charity
The official name of your charity is known as its ‘main name’. Your charity may also have a ‘working name’ which is another name it uses.
Comic Relief example
The main name for Comic Relief is Charity Projects. Comic Relief is the working name.
National Society for the Prevention of Cruelty to Children example
The main name for NSPCC is the National Society for the Prevention of Cruelty to Children. NSPCC is the working name.
Not all charities have working names.
Your charity’s main name or working name must not:
- be the same as or too similar to the main or working name of an existing charity
- use words you do not have permission to use, for example a trade mark
- use offensive words or acronyms
- be misleading, for example suggest your charity does something it does not
Search the charities register to check the names of registered charities. Unregistered charities will not appear in the register. You should search the internet to see if other charities or organisations have similar main or working names.
You may have to change your charity’s main or working names or stop using them. This can happen if they are too similar to another charity’s name or they use words that are not allowed. This can delay your charity registration.
Words you need permission to use
You need evidence that you have permission to use:
- the name of a famous or copyrighted work, such as a book or a piece of music
- the name of a famous person or character
- trade marks, such as Olympic or Paralympic
- royal titles, such as King, Queen, Prince, or His or Her Majesty
Using ‘charity’ in a name
You can use the words ‘charity’, ‘charities’ or ‘charitable’ in your charity’s name but you need approval from the Charity Commission if you use them when you register a company name with Companies House.
Non-English names
You must include a translation of any non-English words in your charity’s name when you register.
4. Structures
You must choose a structure for your charity, which will affect things like:
- who runs the charity
- how the charity is run
- what the charity can do, for example employ people or own property
There are 4 common charity structures.
Charitable company
Your charitable companies will have to be limited by guarantees rather than shares when you register. Select ‘private company limited by guarantee’ on the form.
Trustees have limited or no liability for a charitable company’s debts or liabilities.
Apply online
You can apply online to register a charitable company with Companies House.
Apply by post
Fill in the form to register a charitable company with Companies House by post.
It costs £40.
You may also need:
- continuation sheets if you need extra space to write
- a Welsh version of the form
Charitable incorporated organisation (CIO)
A CIO is an incorporated structure designed for charities. You create a CIO by registering with the Charity Commission. You do not need to register with Companies House.
Trustees have limited or no liability for CIO debts or liabilities.
Charitable trust
A ‘charitable trust’ is a way for a group of people (‘trustees’) to manage assets such as money, investments, land or buildings.
Unincorporated charitable association
An ‘unincorporated charitable association’ is a simple way for a group of volunteers to run a charity for a common purpose.
Unincorporated charitable associations cannot employ staff or own premises.
5. Governing document
You must create a ‘governing document’ (or ‘rulebook’) for your charity that explains how your charity is run.
Your governing document lets trustees and other interested parties find out:
- your charity’s purpose
- who runs it and how they run it
- how trustees will be appointed
- rules about trustees’ expenses
- rules about payments to trustees
- how to close the charity
What type of governing document you need depends on your charity structure.
Read guidance on writing your governing document, including example templates.
You can create your governing document using your own templates but it may mean registration takes longer.
The trustees must meet to sign the governing document. You’ll need an independent witness if you’re setting up a charitable trust.
6. Register your charity
You must apply to register your charity if both:
- its income is at least £5,000 per year or it’s a charitable incorporated organisation (CIO)
- it’s based in England or Wales
The rules are different:
Supporting documents
When you apply you’ll be asked:
- about your charity’s charitable purposes
- how you run your charity for public benefit
- for proof that your charity’s annual income is above £5,000, unless you’re a CIO
You’ll also need to give your charity’s:
- name
- bank or building society details
- most recent accounts
- contact details, including a postal address
- trustees’ names, dates of birth and contact details
- a copy of your charity’s governing document (in PDF format)
Proof of income
Proof of income, if needed, can be any one of:
- your charity’s latest ‘published’ annual accounts (in PDF format) - they must have been approved as proof of income by an independent examiner or auditor
- a recent bank statement (as a scanned image)
- a formal offer of funding from a recognised funding body (as a scanned image)