Group or integrated structures
Sometimes it is desirable to set up more than one legal entity for an organisation. Usually this is because; an activity cannot be carried out by law under the first legal entity; tax efficiency, ring-fencing risk, or need for the clear separation of the management of different operations.
Examples of this include:
- A social enterprise or business with an associated charity to run the parts of its operation that can receive charitable status.
- A charity and its wholly owned trading subsidiary.
- A social enterprise with one or more subsidiary companies. Businesses often set up subsidiary companies to ring-fence particular risks. For example, one company may own property and lease it to a related operating company that deals with the service provision, which is run from the building.
- A federation consisting of one umbrella organisation and a number of local organisations. Each local organisation may have the umbrella organisation as its sole member. In addition, the local organisation may be linked to the umbrella body through a contract that franchises the business model and/or licenses use of the brand name and logo.
Read more on choosing to be a charity.