Charitable and community companies

Incorporating a company

A number of types of company are available under the Companies Act 2006 (CA 2006), namely a public or private company limited by shares, private company limited by guarantee (which are primarily used by charities and other not-for-profit organisations and an unlimited company).

A key reason for choosing to incorporate a company as a form of business vehicle (as opposed to a sole trader, a partnership or another form of business vehicle) is that it is a separate legal entity which can enter contracts in its own name and is responsible for its own debts and liabilities. One of its key attractions is that its shareholders benefit from limited liability.

See Practice Note: Incorporating a company.

Company incorporation—glossary of terms

See Practice Note: Company incorporation—glossary of terms.

A company’s constitution

A company’s 'constitution' is defined under CA 2006 as including the company’s articles of association, and any resolutions and agreements affecting a company’s constitution. CA 2006 definition of 'constitution' is not exhaustive and also refers to other documents forming part of the constitution of a company,

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All in? Court confirms when a settlement is 'made' for the purposes of excluded property (Accuro Trust (Switzerland) SA v The Commissioners for HMRC)

Private Client analysis: This case considered the meaning of 'relevant property' under the settlements regime of the Inheritance Tax Act 1984 (IHTA 1984) and, in particular, the time at which this definition is to be tested. The question arose as to whether the trustees of an offshore trust established by a non-UK domiciled settlor were subject to the UK settlements regime in respect of property added to the trust after the settlor became deemed domiciled in the UK, or whether they were exempt from such charges as the trust consisted solely of excluded property. The First-tier Tribunal (FTT) held that whether trust property is excluded property is based on the status of the trust at the time that it was established, not at the time that the property in question was added to the settlement. As a result, the trust in this case did consist solely of excluded property and no inheritance tax (IHT) charges arose as a result of either the ten-year anniversary or capital distributions. The FTT was also asked to consider whether their jurisdiction was appellate, or supervisory only. The FTT held that, while their jurisdiction was supervisory, the questions raised by the trustees were relevant in establishing whether HMRC had acted reasonably and that the outcome (ie that the paid IHT should be refunded and that no further IHT was due) would be the same in either case. Written by Katherine Willmott, senior associate solicitor at Foot Anstey LLP.

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