Choosing the right type of organisation:

Choosing the right legal structure for your organization is a crucial decision that hinges on your specific goals, operational methods, and the people involved. Each type of structure comes with its own set of benefits and drawbacks, and there is no universally perfect option for every group. Understanding these differences will help you make an informed choice that best suits your needs.

For more detailed information on various organizational structures, you can explore the Fishmongers Fishermen’s Associations Toolkit. Follow the links below to access the toolkit here: https://fishmongers.org.uk/new-toolkit-supports-development-of-fishing-associations/

1. Limited Company (Ltd)

A limited company is a business structure where the liability of the shareholders is limited to their investment.

Pros:

· Limited Liability: Shareholders are only liable for the amount they invested.

· Separate Legal Entity: The company is separate from its owners, providing protection for personal assets.

· Credibility: Often seen as more credible and professional than sole traders.

Cons:

· Complex Setup: More complex and costly to set up compared to sole traders.

· Regulations: Must comply with more regulations and reporting requirements.

· Public Records: Financial information is publicly accessible.

2. Limited Liability Partnership (LLP)

An LLP is a partnership where each partner’s liability is limited to their investment.

Pros:

· Limited Liability: Partners are not personally liable for the business debts.

· Flexibility: Allows for flexible management structures.

· Tax Benefits: Profits are taxed as personal income, avoiding corporate tax.

Cons:

· Complex Setup: More complex to set up than a traditional partnership.

· Regulations: Must comply with more regulations and reporting requirements.

· Public Records: Financial information is publicly accessible.

3. Charity

A charity is an organization set up to provide help and raise money for those in need.

Pros:

· Tax Benefits: Charities are often exempt from certain taxes.

· Public Trust: Generally trusted and supported by the public.

· Grants: Eligible for various grants and funding opportunities.

Cons:

· Regulations: Must comply with strict regulations and reporting requirements.

· Limited Activities: Restricted in the types of activities they can undertake.

· Funding: Reliant on donations and grants, which can be unpredictable.

4. Community Interest Company (CIC)

A CIC is a type of company designed for social enterprises that want to use their profits and assets for the public good.

Pros:

· Social Purpose: Focused on benefiting the community.

· Limited Liability: Shareholders are only liable for their investment.

· Credibility: Seen as credible and trustworthy due to their social mission.

Cons:

· Regulations: Must comply with specific regulations and reporting requirements.

· Asset Lock: Assets must be used for the community, limiting flexibility.

· Funding: May face challenges in securing funding compared to traditional businesses.

5. Partnership

A partnership is a business owned by two or more people.

Pros:

· Simple Setup: Easy and inexpensive to set up.

· Shared Responsibility: Workload and decision-making are shared.

· Tax Benefits: Profits are taxed as personal income.

Cons:

· Unlimited Liability: Partners are personally liable for business debts.

· Disagreements: Potential for conflicts between partners.

· Funding: Limited access to funding compared to larger businesses.

The Fishermen of Lyme Bay carefully considered all the different types of organizations before choosing to form a community interest company (CIC). They had several reasons for this decision. First, they didn’t want to make a profit from their organization. Second, they wanted to create a united voice to engage with regulators and politicians. By forming a CIC, they ensured that the organization would remain focused on the community and fishing. This structure helps safeguard their coastal communities by prioritizing social and environmental goals over profit.

A CIC can support coastal communities in several ways. For example, it can promote sustainable fishing practices that protect marine life and habitats. It can also provide educational programs to raise awareness about the importance of preserving the seas. Additionally, a CIC can collaborate with local businesses to boost the economy, create jobs, and enhance tourism. These inshore fleets are iconic to their towns and villages, forming a vital part of local heritage and attracting tourists. They provide jobs and income not just for the fishermen, but also for the shore businesses they support.

Lessons Learned at the Workshop Regarding Choosing the Board of Directors:

During the workshop, we learned several important lessons about choosing the board of directors for our new organization. I had prepared a PowerPoint presentation with detailed information on directors, including criteria, duties, and obligations. This presentation is available at the end of this chapter and in the glossary. However, it became clear that it would have been more effective to share this information prior to the workshop.

Providing a broad overview of what it means to be a director of this new organization ahead of time would have allowed the fishermen to consider whether or not they might be willing to join the board before attending the workshop. This way, they would have had the opportunity to think about their potential role and responsibilities in advance. Additionally, if they needed more information to make a decision or wanted to discuss further, sharing this information beforehand would have given us the time to provide them with the necessary details before the workshop.

To improve the process in the future, we should ensure that all potential board members receive the Directors Role Description and Person Specification form ahead of time. This form is also available at the end of this chapter and in the glossary. By doing so, we can ensure that everyone is well-informed and prepared to make decisions about joining the board, leading to a more productive and efficient workshop.