What is a company limited by guarantee anyway?
News / Thu Dec 09, 2010
Despite the recent ice and temperature, the brave members of WSPC once again slid along through Wotton to get to HQ. The meeting this time focussed on the legal side.
The Swimming Club is trying to attain charitable trust, and want to become a company limited by guarantee, so that they can get a trading status.
To me, that sounds a bit confusing. So what does it actually mean?
By becoming a company limited by guarantee the club gets a formal trading status in a company, but doesn’t pay dividends to share holders. This basically means that it is a non profit making company, but still has status, so the company can, for example, take out insurance, and enter into contracts. It also leads on to becoming a charitable trust.
By becoming a charitable trust, we can be the recipients of grants more easily, than if the pool were to become a business. Running a swimming pool is not often a profit making organisation. Well, certainly not small local pools like Wotton! The costs to run and maintain a pool are high, and the prices that can be charged need to stay low to ensure that the pool is accessible. This way means that the club can apply for grants, and will not be penalised for any outside financial help they receive.
In essence, it gives WSPC a proper status within the real world.
Many thanks to the students at the University of the West of England for all their help and advice with understanding the legal and technical side of companies and charities!