Comment by russss | Hacker News Reader

Comment by russss | Hacker News Reader

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> It seems to me like this is a shortcoming of the English (and American) legal system, where non-profit organizations and such can only be founded as "regular" companies and then tax-exempted. This means they are still subject to all the normal procedures surrounding companies like sales, and still tend to have one or a few owners who are solely in charge of everything.

This isn't true in the UK. There's a structure called a Company Limited by Guarantee, which has no shareholders so it can't be sold. It's an association.

These are quite common, and in fact Freenode Limited is one. It was never "sold" in any conventional sense. There is no owner of Freenode Limited, but Andrew Lee is currently the only voting member so he has full control.

> This isn't true in the UK. There's a structure called a Company Limited by Guarantee, which has no shareholders so it can't be sold. It's an association.

There's one more structure that's (so far) exclusive to the UK: the Charitable Incorporated Organisation [1].

It can be founded as either a foundation (trustees and voting members are the same) or association (usually a larger group of voting members).

The key advantage of a CIO versus a CLG are the less onerous compliance requirements, which go a long way towards keeping smaller charities cheaper to run.

[1] https://en.wikipedia.org/wiki/Charitable_incorporated_organi...

A CIO is more onerous than a CLG because a CIO is a charity, and comes with the charitable reporting requirements (and also the tax benefits).

A pure CLG doesn't have the charitable tax benefits but it's still a non-profit governance structure, and you only have to file with Companies House and HMRC. The CLG is the lowest-hassle non-profit structure.

(Confusingly, CLGs can also be charities - because charitable status can act as a "wrapper" around other corporate structures - and indeed a lot of charities are CLGs because the CIO is a more recent invention.)

I wrote about this, ages ago, I think it's mostly still correct:

https://russ.garrett.co.uk/2009/10/25/starting-a-non-profit-...

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