The major benefit with the formation of a company is that, once formed, it is legally regarded as having its own legal identity.
For that reason, a company can hold property; enter into contracts; and take part in a legal action as a separate legal individual, generally without the Directors of the company incurring individual and personal liability.
A company will consist of directors and its structure is formed by a Memorandum and Articles of Association.
The Memorandum deals with the objectives of the company, while the Articles deal with the rules for such things as members, meetings, and directors etc.
We can provide you with examples if you wish.
Company Limited by Guarantee
A Company that has been formed under the Companies Acts. It has a more or less standard form with clear objectives and powers. It will have members and a Board of Directors.
The members are liable for often only between £1 – £10 if the Company collapses.
A Company such as one would find in the Commercial field, formed under the Companies Act. It has Directors and shareholders and its business is to make profit often, as will be seen, with the role of supporting a parent charity.
Community Interest Company/Social Enterprise
This is a development that was introduced in 2005 and is for social enterprise or, as the Government suggest, is most suitable for “the Entrepreneur with a Social Conscience” (their words not ours).
It can be a company limited by Guarantee or with Shareholders; it must be run for the public benefit.