Case Study: Diabetes UK
Name of organisation
Diabetes UK and Diabetes UK Services Limited
Charitable company limited by guarantee (CLG) with a wholly owned company limited by shares (CLS) as a trading subsidiary
Where, what and how
Diabetes UK is the largest organisation in the UK working with people with diabetes, funding research, campaigning and helping people live with the condition.
Diabetes UK is a company limited by guarantee with charitable status. Given that it is a large organisation with many activities and a large number of staff, it has chosen an incorporated legal form. The company limited by guarantee is the most common incorporated form for large charities. It obtained charitable status due to exclusively charitable its objects and the fact that it operates for the benefit of the public.
Diabetes UK also has a trading subsidiary. This is a wholly owned company limited by shares called “Diabetes UK Services Limited”. It carries out those activities, which Diabetes UK, as a charity, is not legally able to carry out itself due to its charitable status. For the most part these are fundraising activities, working in partnership with business, which by law, and regulations set by the Charity Commission and HMRC cannot be carried out by a charity directly.
Why the form fits
A group structure allows Diabetes UK to carry out fundraising activities which a charity cannot carry out directly.