Before you apply for funding or start your fundraising activities, you need to decide on what type of organisation you are or want to be.

However, it can be a confusing decision to make with endless jargon, legal requirements to adhere to and personal circumstances to consider.

So what are the options?

There are four main types of charity structure:

• charitable incorporated organisation (CIO)
• charitable company (limited by guarantee)
• unincorporated association
• trust

You need to choose the right structure for your charity, depending on whether you need it to have a corporate structure and whether you want to have a wider membership.

The type of structure you choose affects how your charity will operate, such as:

• who will run it and whether it will have a wider membership
• whether it can enter into contracts or employ staff in its own name
• whether the trustees will be personally liable for what the charity does

One decision to make is if you want your organisation’s legal form to be Unincorporated or Incorporated. Each have their own pros and cons:

It’s also worth considering that although being incorporated gives you added protection, it also comes with additional requirements, and work, set by regulators. Should you choose to be incorporated you will also have to:

• have your organisation’s accounts (if the annual income is over £25,000) independently examined each year; and
• submit your organisation’s annual report and accounts to the Charity Commission which will be published online.

The second decision to make is what type of structure you want your organisation to be.

There are four main types of charity structure:

• charitable incorporated organisation (CIO)
• charitable company (limited by guarantee)
• unincorporated association
• trust