Chapter 5 – Creating the organisation

• Articles of Incorporation
• CIC Regulator
• Companies House
• Opening Bank Accounts
• Survey Monkey
• Social Media Platforms
• Website

Articles of Incorporation

Legal Requirements and Considerations When Drafting

When creating the Articles of Incorporation for your organization, there are several legal requirements and considerations to keep in mind. Here’s a simple guide to help you understand what you need to do:

Legal Requirements

1. Name of the Organization:
   • Choose a unique name that is not already in use by another organization.

• We went online to Companies House to search to see if our name was already in use here Find and update company information – GOV.UK
• In addition, we created a free Gmail account, so that we were able to send and receive emails for the organisation at no cost.
  • Ensure the name complies with any naming rules set by the relevant authorities.

2. Purpose of the Organization:
   • Clearly state the purpose of your organization. This explains why your organization exists and what it aims to achieve.

• If you are not registering as a Charity, and the organisation structure you have chosen is not-for-profit, it is very important that your Articles clearly state you are a “not-for-profit” organisation. OBJECTS (Section 5).
• We included some of the information from our mission statement in our Articles.

3. Registered Office Address:
   • Provide a physical address where your organization will be based. This is where official documents will be sent.

• This is important for registering company and opening bank accounts, we were lucky enough to have one of our Directors offer to use his address temporarily.
• You can also register with a local accountant’s firm for secretariat services, where you will be able to use their address as your registered address. Fees for this service vary, in our area they are approximately £240 per year plus VAT.

4. Details of Directors:
   • List the names and addresses of the initial directors who will manage the organization.

• We created a Directors Application form so we could compile all the information at one time from the board of Directors to refer to when completing official documents and opening banking facilities.
• Next, we created a Directors Details spreadsheet, so we had all directors’ information on one document

5. Details of Members:
   • Include information about the initial members or shareholders of the organization.

• We created a Members application form so we could compile all the information needed from those wishing to join the organisation, including information on vessels, owner/skipper, and confirmation that they meet the criteria for membership, and agree to the conditions for membership.

6. Statement of Limited Liability:
   • Specify that the liability of the members or shareholders is limited to their investment in the organization.

• We decided on £1 per member.

7. Capital Structure:
   • Describe the capital structure, including the number of shares and their value if applicable.

• We decided to register as a company limited by guarantee. However, there are many different types of organisations, you can find more information in the Fishmongers Fisherman’s Association Toolkit:  https://fishmongers.org.uk/new-toolkit-supports-development-of-fishing-associations/

8. Duration:
   • State whether the organization is set up for a specific period or indefinitely.

Considerations

1. Compliance with Laws:
   • Ensure that your Articles of Incorporation comply with all relevant laws and regulations.

2. Clarity and Precision:
   • Use clear and precise language to avoid misunderstandings and legal issues.

3. Future Amendments:
   • Consider how easy it will be to amend the Articles of Incorporation in the future if needed.

4. Consult Legal Advice:
   • It’s a good idea to consult with a legal professional to ensure everything is in order.

List of Things to Do

1. Research and Choose a Name:
   • Make sure the name is unique and complies with naming rules.

2. Draft the Purpose Statement:
   • Clearly define the purpose of your organization.

3. Determine the Registered Office Address:
   • Choose a physical address for your organization.

4. Select Initial Directors and Members:
   • Decide who will be the initial directors and members.

5. Draft the Statement of Limited Liability:
   • Specify the limited liability of members or shareholders.

6. Define the Capital Structure:
   • Describe the number of shares and their value if applicable.

7. Decide on the Duration:
   • State whether the organization is set up for a specific period or indefinitely.

8. Consult with a Legal Professional:
   • Get legal advice to ensure compliance with all requirements.

9. File the Articles of Incorporation:
   • Submit the completed Articles of Incorporation to the relevant authorities.

By following these steps and considering the legal requirements, you can successfully draft the Articles of Incorporation for your organization. This will help ensure that your organization is legally compliant and well-structured from the start.

Understanding the Role of the CIC Regulator

Office of the Regulator of Community Interest Companies – GOV.UK

What is the CIC Regulator?

The Community Interest Company (CIC) Regulator is a government body that oversees CICs in the UK. The Regulator ensures that CICs are working for the benefit of the community and not just for private profit. They help make sure that CICs follow the rules and regulations set out for them.

Why is the CIC Regulator Important?

The CIC Regulator is important because they:

• Protect the Community:Ensure that the CIC is genuinely benefiting the community.
• Maintain Standards:Make sure that CICs operate in a transparent and accountable way.
• Provide Guidance:Offer advice and support to help CICs understand their responsibilities.

Compliance and Reporting Obligations

What Do CICs Need to Do?

To stay compliant, CICs must follow certain rules and complete regular reports. Here’s what you need to know:

1. Annual Report:
   • What It Is:A report that explains how the CIC has benefited the community over the past year.
   • What to Include:Details of activities, achievements, and how profits have been used for community benefit.
   • When to Submit:Every year, along with the annual accounts.

2. Annual Accounts:
   • What It Is:Financial statements that show the CIC’s income, expenses, and financial position.
   • What to Include:Balance sheet, profit and loss account, and notes to the accounts.
   • When to Submit:Every year, along with the annual report.

3. Community Interest Statement:
   • What It Is:A statement that confirms the CIC is still working for the community.
   • What to Include:A declaration that the CIC continues to meet the community interest test.
   • When to Submit:Every year, as part of the annual report.

4. Asset Lock:
   • What It Is:A rule that ensures the CIC’s assets are used for the community and not for private gain.
   • What to Include:Details of how assets are protected and used for community benefit.
   • When to Submit:Information about the asset lock should be included in the annual report.

Tips for Staying Compliant

• Keep Good Records:Maintain accurate and up-to-date records of all activities and finances.

• Plan Ahead:Prepare your reports and accounts well in advance of the submission deadlines.

• Seek Help:If you’re unsure about any requirements, seek advice from the CIC Regulator or a legal professional.

By understanding the role of the CIC Regulator and meeting your compliance and reporting obligations, you can ensure that your CIC operates smoothly and continues to benefit the community.

Steps to Register a Company on Companies House

Registering a company with Companies House in the UK involves several steps. Here’s a simple guide to help you through the process:

1. Choose a Company Structure

Decide on the type of company you want to form, such as a private limited company (Ltd), public limited company (PLC), or community interest company (CIC).

2. Register a Company Name

Choose a unique name for your company that complies with naming rules. Ensure it’s not already in use by another company.

3. Select Directors and a Company Secretary

• Directors: You must appoint at least one director. Directors are responsible for running the company.
• Company Secretary: This role is optional but can help with administrative tasks.

4. Decide on Shareholders or Guarantors

• Shareholders: If forming a limited company, you need at least one shareholder. Shareholders own the company.
• Guarantors: For companies limited by guarantee, you need guarantors who agree to pay a set amount if the company goes into debt.

5. Prepare Documents

• Memorandum of Association: A legal statement signed by all initial shareholders or guarantors agreeing to form the company.
• Articles of Association: Written rules about how the company will be run, agreed upon by the shareholders or guarantors.

6. Register an Official Address

Provide a physical address in the UK where official documents can be sent. This address will be publicly available.

7. Choose a SIC Code

Select a Standard Industrial Classification (SIC) code that describes your company’s main business activities.

• When we registered our organisation you were allowed a maximum of four SIC codes. Here is link to a condensed SIC code list. However, there is also a search function if you want to try and search for specific nature of business.

Nature of business: Standard Industrial Classification (SIC) codes

8. Register with Companies House

Submit your application online or by post. You’ll need to provide:

• Company name
• Registered office address
• Details of directors and shareholders/guarantors

You’ll need at least 3 pieces of personal information about yourself and your shareholders or guarantors, for example:

• town of birth
• mother’s maiden name
• father’s first name
• telephone number
• national insurance number
• passport number
• Memorandum and Articles of Association
• SIC code

Set up a private limited company: Register your company – GOV.UK

9. Pay the Registration Fee

• Online: £50 (usually registered within 24 hours)and can be paid by debit or credit card.
• By Post: £40 (takes 8 to 10 days)

10. Receive Certificate of Incorporation

Once registered, you’ll receive a Certificate of Incorporation. This confirms your company legally exists and includes your company number and date of formation.

Documents and Signatures Needed

• Memorandum of Association: Signed by all initial shareholders or guarantors.
• Articles of Association: Signed by all initial shareholders or guarantors.
• Form IN01 (if registering by post): Signed by the person forming the company.

Additional Considerations

• Government Gateway ID: Create a Government Gateway user ID and password for your company.
• Corporation Tax: Register for Corporation Tax with HMRC once your company is registered.
• PAYE Registration: If you plan to employ staff, register for PAYE with HMRC.

Opening Bank Accounts for Your CIC

Opening a bank account is an essential step for your Community Interest Company (CIC). Here’s a simple guide to help you through the process:

Steps to Open a Bank Account

Research Banks:

Look for banks that offer free banking periods for new businesses or CICs. This can help reduce costs in the early stages.

Prepare Documents:

Proof of Identity: Passport or driving license for all directors.

Proof of Address: Utility bills or bank statements for all directors.

Certificate of Incorporation: Proof that your CIC is legally registered.

Articles of Association: The rules governing your CIC.

Business Plan: Outline your CIC’s goals and operations.

Choose the Right Bank:

Compare different banks to find the best fit for your CIC’s needs. Consider factors like fees, services, and customer support.

Visit the Bank or Apply Online:

Some banks require you to visit a branch, while others allow you to apply online. Follow the bank’s instructions to complete the application.

Signatures:

Ensure all directors sign the necessary documents, such as the account application form and any agreements.

Receive Confirmation:

Once your application is approved, you’ll receive confirmation and details about your new account.

Banks Offering Free Banking Periods for New Businesses or CICs

Here are some banks that currently offer free banking periods for new businesses or CICs:

1. HSBC

Free Period: 12 months

Details: Free banking for new businesses and those switching to HSBC 

2. Barclays

Free Period: 12 months

Details: Free banking for small businesses setting up their first business bank account 

3. NatWest

Free Period: 18 months

Details: Free banking for new businesses with a turnover of less than £1 million 

4. Lloyds

Free Period: 18 months

Details: Free banking for new businesses 

5. Tide

Free Period: Forever (with transaction fees)

Details: No monthly fees, pay per transaction 

6. Starling Bank

Free Period: Forever (most features free)

Details: Free banking for small businesses with fewer than 10 employees and less than £1.7 million in annual turnover