In short: To form a charity you need charitable purposes that benefit the public, a group of trustees, a legal structure and a governing document. In Scotland you register with OSCR. In England and Wales you register with the Charity Commission if your income is at least £5,000 a year or you are a CIO.
Starting a charity lets you raise money, attract volunteers and apply for grants for a cause you care about. But a charity is a regulated body, and the rules differ between Scotland, England and Wales, and Northern Ireland. Here is how the process works.
Step 1: Check that your purposes are charitable
A charity must exist only for charitable purposes, and it must benefit the public. Typical purposes include relieving poverty, advancing education, advancing health, protecting the environment and helping a local community. A group that mainly benefits its own members, or that campaigns for a political party, will not usually qualify.
Before you start, check whether an existing charity already does what you want to do. Working with them may be quicker than setting up a new one.
Step 2: Find your trustees
Trustees are the people who run the charity and are responsible for it. For a charity in England and Wales, GOV.UK says you usually need at least three. Choose people with useful skills, such as finance, law or experience of your cause. Some people are barred from being trustees, so check each person's eligibility.
Step 3: Choose a name
Pick a name that is not already used by another charity or company and does not break naming rules. Search the relevant charity register and the Companies House register.
Step 4: Choose a legal structure
The main options are:
- Charitable company limited by guarantee – registered with Companies House and the charity regulator. Members' liability is limited. A good choice if you plan to employ staff, sign contracts or own property.
- CIO (England and Wales) or SCIO (Scotland) – a charitable incorporated organisation. It has limited liability but registers only with the charity regulator, not Companies House.
- Charitable trust – trustees manage money or property for a charitable purpose.
- Unincorporated association – a simple structure for small, volunteer-run groups. It does not have limited liability and is not suitable for employing staff or owning premises.
A charitable company has two sets of rules to follow – company law and charity law – but it is a familiar structure for banks, funders and landlords.
Step 5: Write a governing document
This sets out the charity's purposes, who runs it, how trustees are appointed, rules on trustee payments, and how the charity can be wound up. For a charitable company, this is the articles of association. Charity regulators publish model documents, and many charities adapt these.
Step 6: Register the charity
Scotland. Charities in Scotland register with the Office of the Scottish Charity Regulator (OSCR). An organisation becomes a charity when it is entered on the Scottish Charity Register after passing the charity test. It is illegal to call your organisation a charity in Scotland unless it is on the register. Each trustee completes a trustee declaration.
England and Wales. You must register with the Charity Commission if your income is at least £5,000 a year, or if you are a CIO.
Northern Ireland has its own regulator and rules, so check them separately.
To claim tax reliefs, such as Gift Aid, your charity must also be recognised by HMRC.
Step 7: Set up the basics
- open a bank account in the charity's name
- set up bookkeeping and record-keeping
- agree policies, for example on conflicts of interest and safeguarding
- hold regular trustee meetings and keep minutes
Ongoing duties
Charities file annual returns and accounts with their regulator. A charitable company also files accounts and a confirmation statement with Companies House each year. More detailed accounts are needed as income grows.
How Form My Company can help
We form charitable companies limited by guarantee through our Charity Formation service for £450, including the £100 Companies House fee and VAT. If you want a non-charitable not-for-profit, see our Company Limited by Guarantee service. We can also prepare Resolutions and Minutes for your first trustee meeting. For advice on charitable purposes or registration, speak to the regulator or a charity lawyer.
Frequently asked questions
Does every charity in Scotland have to register with OSCR?
An organisation can only call itself a charity in Scotland if it is on the Scottish Charity Register, which OSCR runs.
When must a charity register in England and Wales?
When its income is at least £5,000 a year, or if it is a CIO.
What is the difference between a charitable company and a CIO?
Both give limited liability. A charitable company registers with Companies House and the charity regulator; a CIO registers with the charity regulator only.
How many trustees does a charity need?
In England and Wales GOV.UK says you usually need at least three. Your governing document sets the exact number.